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HOWTO 
SELL MORE 
FIRE INSURANCE 


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GenColl 


67 BUSINESS GETTING 
PLANS USED AND 
PROVED BY 38 AGENTS 



































































































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Book ;7 ( j 













HOW TO SELL MORE 
'' FIRE INSURANCE 


PROVED PLANS FOR FINDING 
AND FOLLOWING UP PROSPECTS— 
ADVERTISING METHODS THAT HAVE 
BROUGHT RESULTS — TRIED-OUT SCHEMES 
FOR LANDING POLICIES—HOW TO WIN 
BUSINESS BY SERVICE TO CLIENTS— 

HOW TO HOLD CUSTOMERS 


67 BUSINESS GET¬ 
TING PLANS USED AND 
PROVED BY 38 AGENTS 



> * 

J > 9 

> > > 

THE SYSTEM COMPANY 

CHICAGO NEW YORK 
A. W. SHAW COMPANY, LTD., LONDON 

1909 
















A 





Copyright, 1909, By 

THE SYSTEM COMPANY 


Jill 




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CONTENTS 



PART I 

HOW TO GET BUSINESS IN LINE 
Have a Plan 


Chapter 

I. The Sources of Business 


By H. Dalmar, of H. Dalmar & Company 

II. Getting Prospects in Line. 

By L. E. Yager, of L. E. Yager & Company 

III. Making Up A Prospect List. 


Page 

7 

12 

17 


PART II 

HOW TO ADVERTISE AN INSURANCE BUSINESS 

Throw on the Light 


IV. The Essentials of Insurance Advertising. 25 

V. Building Up A Business by Advertising. 34 

By W. W. Powers, of Powers & Powers 

VI. Advertising Schemes That Win Clients. 41 

By A. E. Olson, Manager Insurance Department, 
Woodlawn Trust & Savings Bank 

VII. Calendar Scheme That Brought Results. 49 


PART III 

HOW TO SELL FIRE INSURANCE 
Be on the Ground 


VIII. Getting in Touch with Prospects . 57 

By Bruce B. Stitt, Insurance Manager, L. M. 
Smith & Brother 

IX. Following Up Prospects ... 63 

By John Morey, General Insurance Agent 
X. Landing the Policy. 69 














4 


CONTENTS 


PART IV 


HOW TO HOLD BUSINESS IN LINE 
Keep at It 

Chaptek Page 

XI. How to File Expirations ... 77 

XII. Selling Additional Insurance . 84 

By Sedgwick S. Vastine, Insurance Broker 

XIII. Holding Business at Long Range . 93 

By John B. Math, of Math & Woodrich 

XIV. Systematizing the Office . 99 


PART V 

WINNING BUSINESS THROUGH SERVICE TO CLIENTS 

The Eight Come-back; 


XV. Getting Trade by Building Confidence . 107 

By James D. Flood, of Moore, Case, Lyman 
& Hubbard 

XVI. Adjustments That Create Business . 114 

By B. C. Bean 

XVII. Helping Clients to Fix Insurance Values . 121 

By Arthur K. Woodbury, Manager Metropoli- 
.. tan Department, American Appraisal Company 









Part I 


HOW TO GET BUSINESS 

IN LINE 



A graphic analysis of the sources of fire insurance prospects and the necessary 
steps in the process of getting business in line 























































































































































































Have a Plan 

^T^HE man who is satisfied with what 
A comes to him unsolicited answers few 
knocks at the door. 

The stay-at-home misses daily opportun¬ 
ities that pass at the next corner. 

Get away from the desk—get out of the 
chair-tilting class. Opportunities are in 
perpetual motion. Get after them. 

Don’t let custom dictate the boundaries 
of your business — don’t let convention 
hold you down. 

Lay out a plan, a campaign for new busi¬ 
ness—then go after it. Exhaust every 
source, swing every prospect into line. 

Don’t be satisfied with the business that 
you have—get more. 




CHAPTER I 

The Sources of Business 

BY H. DALMAR 

Of H. Dalmar dt Company 

More customers—that is the open secret of more busi¬ 
ness. When the business scientist lugged commerce into 
his laboratory, he didn’t need an authority to tell him 
why Jones made a million and Smith died a bankrupt. 
His fifty-fifth assistant could have analyzed that prob¬ 
lem. The formula has but two characters and reads 
‘ ‘ More Customers. ’ ’ 

And yet, the solution should have gone a step further. 
The analysis should have been final—it should have 
shown why Jones got the customers, and Smith did not. 
To this, one answer is simple—Jones recognized every 
obvious source of prospects and created some of his own 
—Smith did not. 

Turning the Restrictions of Your Business into Profit- 

building Plans 

Don’t drift along like Smith with an apparent disre¬ 
gard for the future, but sit down and analyze your busi¬ 
ness—fire insurance. You are but human—and you find, 
first, the stumbling blocks, the restrictions, the diffi¬ 
culties. Primarily three conditions have contributed in 


7 





8 


GETTING BUSINESS IN LINE 


building a wall of uniqueness around the business of 
writing fire insurance: (1) The realization on the part 
of nearly every insurable person that he should carry 
fire insurance, (2) the common rate for all companies, 
(3) the frequent indifference of prospects as to what 
company shall insure them. 

But while these restrictions preclude some methods 
of solicitation, they afford the agent help in laying out 
and analyzing his source of prospects. For the very 
reason that fire insurance is almost universally recog¬ 
nized as a commodity as staple as coal and wheat, the so¬ 
licitor is enabled to draw from a clientele bound only by 
the confines of his own territory. The common rate and 
the indifference of clients as to companies allow the 
agent to push his claims for recognition among all pres¬ 
ent and future owners of property. These two general 
sources of prospects—present property owners and pos¬ 
sible owners of the future—are divided into four classes: 
(1) those who should be insured but are not now pro¬ 
tected; (2) those who are not carrying a sufficient line; 
(3)those who are carrying their insurance with other 
agents and from whom you have an opportunity of per¬ 
suading at least a part of their line, as a wedge to secur¬ 
ing all ultimately; (4) those who have the prospect of 
becoming property owners. 

While the average agent does not attempt to classify 
his prospects under these divisions, he does recognize 
that nearly every man in his territory is a prospect for 
his solicitation. 

Getting Down to a Study of the Prospect Field — Making 

Gossip Pay Dividends 

Analyzing your field still further, you will first find 
that your greatest source of prospects is obviously found 


SOURCES OF BUSINESS 


9 


in your list of friends and acquaintances. The other gen¬ 
eral sources are included in strangers whose names and 
possibilities are suggested to you either directly through 
your friends, or indirectly through news of them which 
suggests the opportunity of writing business. Keeping 
these two sources of prospects in mind, the agent plans 
a system which, in his daily work, will at no time let 
possible business of friends or strangers escape his notice. 
That is, he makes gossip and news items pay profits. 
From the newspapers and the gossip of the street he 
gathers such data as real estate transfers, building per¬ 
mits, fire losses, expansion of mercantile houses, mort¬ 
gages, loans, marriages, and the itineraries of the spring 
mover. And in order that he may not forget any such 
bit of news that may prove valuable in the future, he 
uses a clipping file such as is described in the next 
chapter. 

Indications of Opportunities in the Activities of the 
Commercial and Domestic Worlds 

In no instance must the agent belittle the significance 
of these sources of prospects. Fire Josses, observed from 
news items or fire records, indicate rebuilding or the re¬ 
plenishment of stocks of goods, household furniture or 
manufacturing equipment, all necessitating new fire pro¬ 
tection. Possible dissatisfaction with the loss adjust¬ 
ment through the agent who wrote the insurance on the 
destroyed property gives another agent an opening for 
the business. The establishment of new enterprises, the 
building records, the expansion of mercantile houses 
mean, on the other hand, new or increased values to be 
protected against fire loss; and these contribute addi¬ 
tions to the agent’s list of possible clients. 

Real estate operations of almost every kind afford the 


10 


GETTING BUSINESS IN LINE 


opportunity for writing insurance. The man who builds 
or buys a new flat building, house or mercantile estab¬ 
lishment must insure it. The lender on real estate must 
have protection against reduction in the values of his 
security through fire loss. The family moving to a new 
home or the merchant to a new store has goods of one 
kind or another to be insured. The newly married couple 
and the young man with plans of going into business for 
himself are other prospects. Van movers will frequently 
give the names of prospects, and business is often se¬ 
cured on the spot when the solicitor follows the van itself. 

Competition for the insurance on new buildings is 
always keen among insurance brokers and this involves 
the keeping of careful records of all new buildings in 
course of construction. Such records are easily kept 
in the file. The information is obtained from various 
sources. In large cities, the building permits which 
are necessary and are a matter of public record, are filed 
with the city officials and canvassed daily by the brokers. 
In the smaller towns a record of new buildings going 
up may be obtained from the daily newspapers or from 
gossip of the street. A transfer of real estate always 
involves a change of insurance, therefore it is also quite 
as necessary for the insurance broker to know of real 
estate transfers as to know of new buildings going up. 
These may be kept track of from the county records and 
the weekly newspaper notices. Many cities also have 
publications which record transfers of real estate. 

Opportunities for Business at Particular Seasons of 

the Year 

During the busy moving seasons in the spring and in 
the fall, there are many changes in the location of stores, 
offices and even warehouses, as well as the opening of 


SOURCES OF BUSINESS 


11 


new business establishments in the mercantile districts, 
which should be observed by the insurance agent. These 
are usually announced in advance by signs on the old 
establishment or on the new ones and a tour of the sec¬ 
tion at these periods gives the agent fruitful opportu¬ 
nities for business. Agents of transportation companies 
can often furnish him advance information of large 
shipments of various commodities which are being trans¬ 
ferred to his locality for storage; and these, too, repre¬ 
sent a possible line of insurance for him to solicit. 

Thus, in outlining his sources of prospects, the agent 
finds that he must include every field, and come in con¬ 
tact with every variety of mankind. He learns that be¬ 
sides property owners, there are many other prospective 
clients—that nearly every person represents a possibility. 
Therefore, the fire insurance agent notes not only prop¬ 
erty owners, but makes his list comprehensive, including 
every person from whom he thinks he may some day 
secure business, and every source which some time in the 
future may result in an unprotected risk. 


Use Your Eyes 

S PECIFIC opportunities noted—seiz¬ 
ed—improved. There you have 

the program of most successes in fire 
insurance. 

Every minute in the day a source of 
more business faces you. Not to be 
blind; to recognize the chance—to see 
every crevice that invites your wedge— 
this is to win. 




CHAPTER II 

Getting Prospects in Line 

BY L. E. YAGER 

Of L. E. Yager dfc Company J 

“Confound it, I knew about that,” you exclaim when 
you learn that Jones has purchased the Majestic Block 
on Main Street and given the insurance to your rival. 
And thus it is repeated from day to day. You know and 
yet you don’t. You should have remembered, but you 
didn’t. While you know that remembering means suc¬ 
cess, you continue to forget. Business that might be 
yours for the asking slips away from you because you 
forget to make a strike at the psychological moment. And 
yet this is only natural. The mind is unable to register 
and index all the details of a busy life. It demands an 
assistant. 

The Agent’s First Aid—A Clipping File Showing the 

Source of Prospects 

The insurance agent needs several of these aids, but 
the first is the clipping, or “source of prospects” file, 
mentioned in the preceding chapter. Not only does such 
a file classify all the sources of possible business, but 
upon it depends, primarily, the effectiveness of the 
agent’s lining up of prospects. 


12 







LOCATING PROSPECTS 


13 


This file is designed solely for collecting and classify¬ 
ing sources of prospects. It must in no way be confused 
with the prospect file described in the succeeding chap¬ 
ter. This clipping or “source of prospects” file is the 
most informal of all those used by the fire insurance 
agent, and therefore may be improvised from old files 
in the office. All that is required is that it be of con¬ 
venient size and equipped with memorandum cards and 
guides for the thirty-one days of the month and the 
twelve months of the year. 

Probablv the most convenient file is one of a size call- 

*/ 

ing for cards four and a half inches long and three inches 
high. The file itself should usually be about eighteen 
inches in length, thus providing ample room for a year’s 
filing. 

Putting this file to use is a very simple matter. As 
the agent hears, for instance, of a possible building to 
be erected, he jots down the name on a card or slip of 
paper and drops it behind a guide card a week or a 
month ahead, according to the time he thinks it best to 
follow up the clue. Newspaper clippings of marriages, 
fire losses, business expansions and all the printed items 



A simple “tickler file’ is here represented. Behind the various date guides, clippings 
and cards are placed as reminders of calls to be made from day to day 




















14 


GETTING BUSINESS IN LINE 


which relate to the source of prospects are slipped behind 
guide cards for future reference in the same manner. 
When these general rumors can be traced down to specific 
individuals, their names are entered upon the more sys¬ 
tematic prospect file where the business can be thor¬ 
oughly watched. 

The clipping file, to preserve its simplicity, has but 
one set of daily guide cards. These are used for the en¬ 
tire twelve months. Each morning the card for that day 
is moved forward to its position in the next month, so 
that at the end of thirty days, the daily cards are in their 
proper places for the succeeding month. Of course, mat¬ 
ters which are not disposed of from day to day and 
which need attention at future dates, are also moved 
forward with the guide cards. Such a file, if carefully 
kept, brings every source of prospects to your desk. It 
crystallizes and preserves the news and gossip of the 
street. 

While this file affords a means of lining up the busi¬ 
ness so that no opportimities will be slighted, it does not 
collect this information by itself. Nor is it possible to 
find a mechanical method that will do so, for this depends 
upon the unstable quality of the agent’s personality and 
ability. Still it may be wise to repeat the general sources 
of business and impress the agent with the necessity of 
making each one pay profits. 

Draining Every Source of Business—Securing the 
Co-operation of Your Friends 

Every fire loss offers opportunities at the time of re¬ 
building, or through dissatisfaction with the settlement. 
It also offers opportunities for canvassing near-by res¬ 
idents—the persons who, for a few days, have the fear 
of fire uppermost in their minds. The canvassing of new 


LOCATING PROSPECTS 


15 


enterprises and of new buildings must not await their 
establishment or publication; they must be anticipated. 
This is best done by keeping in close touch with the 
county recorder of deeds and the city clerk. By culti¬ 
vating the close acquaintance of these men, information 
may be received daily—always before the public is gen¬ 
erally aware of the project. 

In the offices of the recorder and the county clerk, the 
agent can also secure advance information as to all 
transfers and sales of property; marriages, deaths, loans 
and expansions of business—all of them possible sources 
of business. 

Transfers of property always suggest a prospect of 
writing business for the new owners; the change of 
owners often presents new conditions which make it pos¬ 
sible for the agent to secure a risk which he had solicited 
in vain before. 

It generally follows that after marriages there will at 
least be household furniture to insure at once, and as the 
couple grow more prosperous, a home, and possibly a 
business. For a similar reason bachelors’ effects and me¬ 
chanics’ tools are good risks to secure, not for present 
profit, but for the business of the future. Deaths are 
followed by the transfer of property, and risks which 
have been impregnable to your attacks may be had from 
the heirs at the first expiration. Loans necessitate col¬ 
lateral security, which the lenders demand be insured. 
By keeping in touch with the bankers much business may 
be secured in this way. 

These, to some extent, are the general sources of pros¬ 
pects from which the agent draws his revenue. Before 
he can hope to build up a maximum amount of business, 
he must first analyze the broad field of prospects and the 
specific chances which may be peculiar to his locality. 


16 


GETTING BUSINESS IN LINE 


The second step is to canvass these sources daily, secu 
mg the information early and recording it all in tl 
clipping file, long in advance of the agents who wa 
until a risk becomes a tangible reality before puttir 
in a bid. Solicit the business while buildings are in tl 
air, while they are on paper, and before they are sob 
Keep your solicitation up to the minute. 


On Early Rising 


T HERE is a certain observation— 
too old and too homely to quote 
—which takes up the proposition of the 
early-rising bird and the unfortunate 
fish bait. The statement is subject to 
proof—in the fire insurance field, among 
other places. 

The wide-awake agent writes the pol¬ 
icies. He stands in the market-place 
where the world’s news notes converge 
from north, east, south and west. 
Every happening has a direct signifi¬ 
cance for him—in his business. 


Before the rumor has filtered through 
his rival’s storm-windows, the out¬ 
door agent sees the clew—follows it— 
clinches his case. 







CHAPTER III 

Making up a Prospect List 

Prospects are the insurance man’s basis of business. 
Consequently every person who shows any promise of 
becoming a client should be watched and cultivated as 
closely as the gardener would care for and encourage 
a plant that promises fruit. And the first requisite to 
this constant contact with the prospect is a system of 
records which will place all information regarding him 
available for immediate reference. 

Advantages of a Card System in the Work of the Fire 

Insurance Agent 

Several systems have been devised and used success¬ 
fully for listing prospects. No one of them, probably, 
would suit the circumstances of every agent, and pos¬ 
sibly all of them may be made more practicable for every 
day use by the addition of some supplementary pro¬ 
vision. to meet the individual salesman’s particular 
needs. The system here described combines the best fea¬ 
tures of a number of these and is so flexible in its method 
of operation that with slight variations, it should meet 
the needs of almost any agent. 

This listing scheme, like the clipping file, is based on 
the card system—a method which seems particularly 


17 















18 


GETTING BUSINESS IN LINE 



NAME 

ADDRESS 4 

PROPERTY 

INSURANCE 

CARRIED 

AMOUNT 

COMPANY 

RATE 

CXPIRES 

YEAR 

MONTH 

DAY 

























' 












PROBABLE INSURANCE 

DATE CALLED 

REMARKS ON INTERVIEW 

TO CALL AO.AIN 


• 



* 




» 





- —— ---— - - . ...... 



Form I: Chronological prospect file, capable of recording names, appointments and data 
throughout the agent’s lifetime. Such a file remembers every detail 


suited to the salesman’s work. By its use each pros¬ 
pect is individualized, each interview is recorded, indis¬ 
criminate canvasses are avoided, ‘‘dead” prospects are 
quickly disposed of, systematic methods of work are pro¬ 
moted in the agent himself, and a correct judgment of 
the value of prospects is developed. 

The chief variations of the system are in the manner 
of filing. The first of these, and the one which is pos¬ 
sibly the most convenient, may be designated as the date 
system, since its primary purpose is automatically to 
register each day’s prospects for the solicitor. The en¬ 
tire record is entered upon a single card (Form 1) which 
is provided with blanks for filling in all the details in¬ 
volved in the canvassing of the average prospect. Name, 
address and character of the risk are shown at the top, 
a memorandum of the insurance already carried at the 
right, and blanks for recording interviews and appoint¬ 
ments below. 






































































MAKING UP A PROSPECT LIST 


19 


To provide for systematic filing of these cards the cab 
inet should be divided by labeled cards into twelve sec¬ 
tions, one for each month of the year, and in addition 
there should be thirty-one cards bearing numbered tabs 
for the thirty-one days of the month. 

When the agent first gets in touch with a prospect, he 
fills in one of the cards as completely as possible and 
files it in the case under the date when he considers 
it advisable to make a call. For the current month, he 
places the thirty-one daily guide cards in the front part 
of the file and drops his new card back of whatever date 
he selects as the logical time for the initial call or fol¬ 
low-up, as the case may be. If the call is to be made 
several months later he places the card in the section 
back of the guide card for the proper month. The cards 
should be placed in alphabetical order under each divi¬ 
sion, to facilitate selection in case the record of a particu¬ 
lar prospect is to be looked up. 

So, while his prospect cards are all classified under a 
general division of months, his work for the current 
thirty days is specifically outlined. At the end of each 
month, he takes the next group in order and judging 
from the exact dates noted on the cards themselves, dis¬ 
tributes them among the daily guides. Thus it requires 
but a few minutes’ time again to lay out his work for 
another thirty days as far as his old prospects are con¬ 
cerned. 

Preparing for the Work of the Present and Fortifying 
Yourself Against the Future 

It will be observed that this prospect card contains 
at the left spaces for entering the plan of insurance 
proposed and for the date the prospect is written, in case 
the agent succeeds in selling him a policy. When this 




20 


GETTING BUSINESS IN LINE 


is filled in the card becomes a client record and is re¬ 
moved to a file which keeps tab of future expirations. 

Once put into operation, this system will be found of 
inestimable help to the agent for keeping in prompt 
touch with the circumstances of all his clients. Each 
morning the current date brings before him the work of 
the day. Calls that have been set for that specific time 
are made. If the prospect is written, the remainder of 
the card is filled in as suggested. If he is not written, it 
is only necessary to make note of the next follow-up date 
and file the card ahead. It will then come up again for 
attention automatically at the proper time. 

There are two other variations in the method of filing 
the prospect cards which may appeal to some agents as 
being more convenient for their purposes than the one 
first presented. One of these is the straight alphabetical 
arrangement. In this the filing cabinet is subdivided by 
guide cards bearing the letters of the alphabet anu the 
prospect cards are placed in order so that it is possible 














-T- 

JAN. 

FEB 

MAR. 

APR. 

MAY 

JUNE 

JULY 

AUG.' j SEPT. 

OCT. 

NOV. 

DEC. 


ADDRESS 

PROPERTY 

INSURANCE 

CARRIEO 

■ AMOUNT 

COMPANY 

RATE 

EXPIRES 

YEAR 

MONTH* 

DAY 




































• 


PR08AELEINSURANCE 


DATE CALLED 


REMARKS ON INTERVIEW 




TO CALL AGAIN 


Form II: Alphabetical prospect file which lists names in sequence and at the same 
time provides for a chronological method of following up prospects 
















































































MAKING UP A PROSPECT LIST 


21 


to pick out any particular card at any time. 

To provide for the follow-up, the names of the twelve 
months of the year are printed across the top margin 
of each card. Then to designate a certain future date 
for calling on a prospect a metal clip is placed over the 
proper month on the margin. The exact date, if there 
be one, is entered on the card itself. All prospects de¬ 
manding attention at a certain time will then be desig¬ 
nated by the row of clips extending from front to back 
across the file over a certain date. That is, on the first 
of September, for example, the agent by glancing across 
the top of the file, will be able to pick out all the cards 
due for a follow-up that month. 

A System Which Conspicuously Defines the Nature of 

Every Risk 

An additional feature which may be incorporated in 
this compact index is an arrangement of different colored 
cards and clips which indicate the nature and amount 
of each risk. Thus a white card may represent factories, 
a red card stores, and a blue card household goods. The 
metal clips are used in the way described to indicate 
follow-up dates, and by using a variety of colors of these 
clips the approximate amount of the probable insurance 
may be specifically indicated. A red clip, for instance, 
may represent anticipated insurance of $1,000 or less, a 
blue clip $5,000 to $10,000 and the green clip may show 
that the expected business is in excess of the latter figure. 

Still another arrangement of the file, involving the use 
of the same system of clips, is the geographical method. 
Here the cabinet is divided into sections according to the 
prospect's location. This is seldom found practicable 
because the average agent usually works in a single town 
or over a rather restricted territory, in which the alpha- 


GETTING BUSINESS IN LINE 




EVANSTON 


KENILWORTH 


WILMETTE 


RIVERSIDE 


JAN. FEB. MAR. APR. MAY JUNE JULY AUG. SEPT. OCT. NOV. DEC 


NAME 


ADDRESS 


PROPERTY 


INSURANCE 

carried 


AMOUNT 

COMPANY 

RATE 













. . ‘ . , • 



■ 




<fl 

UJ 

tr 

a 

2 


YEAR 


MONTH 


DAY 


PROBABLE INSURANCE 


.DATE CALLED 


REMARKS ON INTERVIEW 


TO CALL AGAIN 




Form III: Geographical prospect file, which lists prospects according to location, and 
which also affords a means of regular follow-up on prospects 


betical or date system answers every purpose; but it may 
prove of value to city agents, who wish to list their pros¬ 
pects according to streets, suburbs or buildings. 

The primary purpose of this system is to file the pros¬ 
pect list in such a way that, with the least trouble, the 
solicitor may pick out names in the same general geo¬ 
graphical location. When calling on a new prospect, he 
can note the direction in which he is going and can visit 
other prospects who might advantageously be seen on 
this particular trip. 


The Card Memory 

HHHE card index memory never for- 
gets, always gathers; it is exper¬ 
ience crystallized—unflagging. 




































































Part II 


HOW TO ADVERTISE AN 
INSURANCE BUSINESS 



Factors in fire insurance advertising, showing mediums and publicity plans that 
have been most productive of results in building greater business 






















































































































Throw on the Light 

INTEGRITY advertised is the big 
A secret of a full policy register — a 
thriving agency. 

You may be right as a man; your com¬ 
panies may be the strongest and the 
l}iggest; your facilities may be the best 
for caring for the insured. 

But the public has got to know. 

Keep always the talking point of integrity 
before the public. Turn on the light. 
Get in the glare of right publicity. Make 
known the many merits of your under¬ 
writing power. 

Success in advertising is simply focusing 
the diverging rays of public opinion at 
your agency desk. 

Make your integrity—your fairness—your 
power, known. 

Throw on the light. Advertise. 




CHAPTER IV 


The Essentials of Insurance Advertising 

The agent who introduced his fire insurance business 
by hanging out a neat sign and inserting a formal card 
in the newspapers, missed the first elements of successful 
advertising. He failed to arouse curiosity, and, there¬ 
fore, failed to reach the point of contact with the pros¬ 
pect. 

The aim of all publicity is to arouse the curious in¬ 
terest of the reader, to suggest a want and to convince 
the prospect that no other agency can so perfectly supply 

that want. 

Surely these three elements of successful advertising 
have not been incorporated in the limited attempts to¬ 
ward fire insurance publicity. Insurance agents, by 
virtue of the peculiarities of their profession, have been 
backward in claiming recognition through advertising 
mediums. They have felt that the establishment of max¬ 
imum and minimum rates has placed them all upon an 
equal footing; that they have had no basis for advertis¬ 
ing campaigns and must depend upon their own personal 
solicitation. 

And yet, solicitation is as much an advertisement as 
the filling of a column in the newspaper. The solicitor 
in his personal calls holds forth the same arguments for 









26 ADVERTISING AN INSURANCE BUSINESS 


the business of the prospect as those placed on the 
printed page. The insurance business is not a formal 
occupation. To get the business, strong publicity bids 
and active solicitation must go hand in hand. The time 
is past when orders come without solicitation and adver¬ 
tising. 

The Analogy of Bank and Fire Insurance Advertising — 
The Four Elements of Publicity 

Ten years ago the impressive bank president would 
have shuddered at the thought of advertising. Since 
then progressive banks have substituted large type, 
strong arguments, and artistic pictures for the formal 
card in the financial section. As a result, some of these 
advertising banks hold ten times their proportionate 
share of the nation’s deposits. 

Now a bank and a fire insurance agency are similar 
in two features: bank interest and insurance rates are 
nearly uniform throughout the country, and each offers 
free services. The time is past when the majority of 
banks refuse to advertise, and a similar condition is be¬ 
coming apparent in the insurance world. The banks 
choose the mediums of advertising which will best exploit 
the particular features they have to offer. This must 
be the attitude of the advertising fire insurance agency. 

In seeking to expand his business, the agent must 
analyze the four elements of fire insurance advertising: 
(1) He must determine the best methods of reaching the 
prospects in his particular field; (2) he must determine 
the seasons for advertising; (3) he must select the best 
mediums; and (4) he must build up his selling and 
service arguments. 

With but few exceptions, the newspapers will be the 
most effective mediums for advertising. This is especially 


ESSENTIALS OF ADVERTISING 


27 


true in small towns where the newspapers are read from 
first page to last, and where the readers take a stronger 
personal interest in local enterprises than do subscribers 
to the larger city dailies. Trade journals and provincial 
weeklies are also closely read. For this reason, adver¬ 
tisements inserted in these publications are almost sure 
to be seen by every reader. The value of circulars, form 
letters and advertising schemes depends upon their 
preparation and local conditions. For this reason, the 
agent will have to check his results carefully. 

Seasons for Advertising Fire Insurance—Planning 

the Campaign 

As another preliminary to advertising his business 
the agent must determine those seasons for publicity 
which will best suit the particular conditions in his field. 
But he will find in a general way, four opportune periods 
for pushing his claims: the moving, borrowing, building 
and dry seasons. 

During the moving times of spring and fall the pros¬ 
pect field is enlarged by the addition of every family 
seeking a new home. Also, in the early spring, the agent 
can put his name before the contractors and builders 



Quoting specific prices for fire insurance on dwellings and household property. This 
card was circulated as a blotter, printed in red ink 





28 ADVERTISING AN INSURANCE BUSINESS 


by advertising in the local trade papers, if there are any; 
otherwise, he will use the local newspapers. 

Every loan of money on buildings necessitates a fire 
insurance policy for security. Hence, in the more de¬ 
pressed seasons of the year when manufacturing and re¬ 
tail concerns are borrowing money, the agent can aim 
his advertisements toward the borrowers. 

The quotation of easily obtainable statistics a week 
preceding the fourth of July and the twenty-fifth of 
December usually impresses the uninsured with the sense 
of his danger at holiday time and puts him in a recep¬ 
tive mood for insurance. This is also true during dry 
spells when a boy, a match and a pile of leaves may start 
a conflagration which can only be checked by calling out 
the fire department. 

During such a dry spell a Chicago suburbanite came 
into town to insure his barn. He had caught his sons 
with a bon-fire near it in the morning, and that after¬ 
noon determined to be protected. When he arrived home 
with his policy, he found a pile of charred timber and 
ashes—all that was left of the barn. The bon-fire of 
the morning had not been entirely put out. Thus the 
Chicago agent had actually insured a barn while it was 
burning—and the loss was paid. 

The Value of Beading Notices in the Local Column of 

Small Daily Payers 

Probably the most effective season for advertising is 
that period immediately following some local fire, or 
such a conflagration as the San Francisco and Baltimore 
catastrophes. At such times the fear of fire is upper¬ 
most in everyone’s mind. Everyone is reading of it. 
For the time being it is on the tip of every tongue. That 
is the psychological moment for the agent to make a 


ESSENTIALS OF ADVERTISING 


29 


strike for new business—to profit by the circumstances 
which have won men to his way of thinking. 

In a small town a fire is a big event. And the first 
question asked is about insurance. Every paper in the 
smaller towns has a column or so devoted to the local 
events which have occurred during the day. These items 
—the crystallized gossip of the street—are read by every¬ 
one taking the paper. The smaller papers will not ob¬ 
ject to alternating advertisements with these items. Ad¬ 
vertisements of this character create receptive interest 
among the readers and pave the way for solicitation. 

Prompt settlements are one of the best advertisements 
an insurance agent can have, and he can be assured that 
the fact is well known if he inserts a few lines in the 
reading notices, as suggested above. He says something 
like this: ‘ ‘ Through Brown & Brown, the fire insurance 
agents, Mr. Todd, whose home burned Wednesday night, 
received this morning a check from the Pacific Fire In¬ 
surance Company for $3,496. This indemnifies Mr. Todd 
in full for the loss of his home and furniture. He will 
rebuild at once on the old site. Brown & Brown, by 
placing the insurance money in Mr. Todd’s hands this 
morning, have established a local record for prompt 
settlement. Forty-eight hours after the report of the 
fire, Mr. Todd had the check in payment for his loss.” 

Such insertions as these in the local papers in medium 
sized towns have a tremendous effect toward influencing 
patronage. Frequently the insured is so pleased with 
the promptness that he will gladly sign his name to a 
statement. If they are worth it, these statements can be 
set forth in a large display advertisement, but usually 
they are just as effective in the reading notices. Some 
agents make a practice of getting a statement from every 
man to whom they have paid a loss claim. When they 


30 ADVERTISING AN INSURANCE BUSINESS 



secure enough of these they have business-pulling copy 
that will catch trade whenever it is used. 

Such material, however, is best used in circulars and 
form letters. An agent who has not had many fires can 
easily secure statements from his more prosperous clients 
whom he has served satisfactorily. 

Malting Capital Out of Local Fires—Adopting a Slogan 

and Pushing Your Claims 

Should a fire occur in uninsured property, there is an 
opportunity for an educational talk on insurance. 
Almost everyone in town will know that the property 
was uninsured, and that the owner may have lost every¬ 
thing he had. It is not necessary to hurt the owner’s 
feelings, but a reading notice to the effect that it costs 
only $5.00 for $1,000 worth of insurance for three years 
at “this agency,” will point a moral to the readers. 
Many uninsured persons do not realize how little it costs 
to be insured. 

Of course any price of fire insurance which the agent 
may offer is the same as that of his competitors, and for 
this reason he is precluded from extensively exploiting 



ESSENTIALS OF ADVERTISING 


31 


that feature. He must offer service, strong companies 
and advice. Here his form letters and circulars, incor¬ 
porating the signed statements of his more prominent 
clients, play an important part. In mailing these to a 
carefully selected list, the agent has an inoffensive way 
of proving to others that he is a real servant. If he has 
been in business for a number of years, he may be able 
to adopt for a slogan, “Sixteen years without a contest ,’* 
“Fifty fires and fifty pleased clients” or any statement 
which his business warrants. 

The one aim of the fire insurance agent is to individ¬ 
ualize himself, and he can do this only by systematic, 
personal solicitation, and by unique advertising cam¬ 
paigns. So great is the desire to individualize the 
solicitor, that the large agencies of Chicago allow their 
solicitors to leave the firm name off their cards entirely. 
These solicitors get out their own calendars, blotters and 
stickers. 

In advertising service, the agent should emphasize the 
advice which is freely and* frequently given to customers. 
This advice naturally consists mostly of means whereby 
the insured can lower his rate, counsel as to the kind of 
insurance he should place on his new building and ex¬ 
planations of the co-insurance clause, blanket policy and 
the distribution average clause. A rate lowered through 
the advice of the agency is as much a cause for discreet 
advertising as is the settlement of a loss. 

At the end of the year some agencies print a frank 
history of their local career. They list losses paid, poli¬ 
cies written, services rendered, statements of their com¬ 
panies and a request to show what they can do for the 
prospect. 

The other argument set forth in all advertisements is 
strength of companies. Those that advertise themselves 


32 ADVERTISING AN INSURANCE BUSINESS 


in the magazines do not need as much exploitation as 
other companies, although capital can be made of the 
fact that an agency has a widely advertised company. 
A company may be neither old nor exceptionally rich, 
but there are favorable features in every company. 

Some of the Chicago agencies print a list of their 
companies, adding the assets and capital of all their com¬ 
panies into grand totals. This is an effective way of 
showing strength and ability to write large risks. 

In all publicity, some effort is made to provide a check 
on the advertising so that the bad may be eliminated 
from the good. This check is provided by either aiming 
the advertisements at a particular class, or by using a 
particular medium of advertising. Thus, in fire insur¬ 
ance, an agency might advertise vacation insurance, 
seeking to pull business from persons leaving town with 
household goods uninsured. Obviously, the results would 
be easily traceable. Again, the agency might have ad¬ 
vertisements running in the renting lists of the real es¬ 
tate firms and here, also, the results could easily be as¬ 
certained. 

Putting Distinctiveness into the Publicity—Watching 

the Mechanical Details 

Distinctiveness in fire insurance advertising is, finally, 
to be sought in every possible way. Not only must em¬ 
phasis be laid upon the one or two points of extraor¬ 
dinary quality or service belonging to the company in 
question; not only must the personal history, fitness and 
service of the agent be emphasized, but every form of 
advertising which the solicitor resorts to must bear as 
prominently as possible this same stamp of distinctive¬ 
ness. 

To the client, fire insurance is simply fire insurance, 


ESSENTIALS OF ADVERTISING 


33 


and companies, as a rule, are all upon the same plane 
A man notices and remembers only those things which 
are different from the general run, and it follows that 
the successful fire insurance solicitor must be “differ¬ 
ent”. As in the case of a retail store, he should seek to 
develop personality. And in this development, adver¬ 
tisements which in mechanical make-up follow a dis¬ 
tinct style different from that used by other agents, 
will be found extremely helpful. 

Banks have long since learned this truth. The insur¬ 
ance solicitor may well follow their example by getting 
upon a confidential footing with the printer, taking 
up the technical details of that trade, studying the gen¬ 
eral typographical effects desired, and insisting that 
they be secured. Accumulated power will be gained by 
making each advertisement mark a distinct step in the 
discussion and building up of the business; by treating 
in each only one phase of what the agency has to offer, 
and by making that one appeal a knock-down argument. 


Individuality 

I NDIVIDUALITY is the prime re¬ 
quisite of an agency seeking a place 
in the insurance market. As a man 
without originality is nobody, so a com¬ 
modity, a business proposition without 
distinctiveness is forgotten has no 
standing in the eyes of the prospect. 




CHAPTER V 

<M 

Building up a Business by Advertising 

BY \V. W. POWERS 

Of Powers & Poivers 

When we launched our fire insurance business, we 
found that this profession was based primarily upon 
friendship. Now we had plenty of friends, but so had 
our competitors—and, in most instances, they had pos¬ 
session—nine points of prosperity. If we were to make 
good, then, it was up to us to devise some new method, 
some other claim than friendship, heavy enough to tip 
the balance in our favor. How could we do this? 

Our first determination was to take advantage of the 
very condition which gave the other agents their hold 
on the business. We determined to show our prospects 
that fire insurance protection is not a matter of friend¬ 
ship, but a hard business proposition. With this idea 
in view we concluded that there were three arguments 
upon which we could base our claims for recognition: 
(1) price, (2) companies and (3) service. 

Putting the Fire Insurance Agency on the Basis of a 

Retail Store 

How to push these claims and get them before the pub¬ 
lic became a problem. While we realized that fire insur- 

34 









BUILDING UP A BUSINESS 


35 


P 


Who Carries Your losuraoce? 




SDUSQJimDTI©© ? 


The Northern Assurance Company of London, England, 
•-so far as mere size goes, — is the fourth largest company do¬ 
ing business in the United States. 

This company has been doing a healthy business since 
J836, during which time it has paid Seventy Millions of Dollars 
in fire losses, — paid them promptly and without demur. 

The Northern does business on broad lines, - its settle¬ 
ments are fair, — it makes returns quickly. 

The Northern Fire Assurance Company of Lon¬ 
don, England, Is represented In Waltham by 

Powers & Powers 

Brokers In Beal Estate 

215 Moody Street Phone 609-1 

Fire Insurance 



One of a series of newspaper advertisements which had for its slogan, “Who Carries 
Your Insurance?” Each day an advertisement was devoted to exploiting 
the good points of some one company which the agent represented 


ance depends greatly upon personal solicitation, we knew 
that it would be impossible by this means to extend our 
bid for business into as large a field as ambition dictated. 









36 ADVERTISING AN INSURANCE BUSINESS 


Therefore, we determined to introduce an innovation 
in our vicinity—newspaper advertising. In outlining 
this policy, however, we were aware that it would prob¬ 
ably be impossible actually to make this advertising a 
salesman, such as is done in other businesses. But it was 
the best means of introducing ourselves to the public, 
and has since served as one of our best methods of ap¬ 
proach. 

After we had decided to use the newspapers as a means 
of exploiting our claims, it became necessary to deter¬ 
mine to whom and how we would advertise. The answer 
to this problem soon became apparent. We must make 
each advertisement a unit, aimed at a particular class. 
We must not allow our advertisements to scatter. They 
must hit the mark; what was lost in range must be made 
up in effectiveness. 

In preparing our advertisements we felt that they 
should really be well edited selling talks and, therefore, 
should contain the three arguments upon which we were 
basing our solicitation: (1) price, (2) companies and 
(3) service. 

In the first we were handicapped by the universal 
rates, fixed by the underwriting boards. We could not 
cut under this price, but we did show the prospect how 
he could lower the cost of his protection by improving 
his risk and installing inexpensive fire extinguishers. 
We advertised this persistently and took every oppor¬ 
tunity to prove it with a personal call. 

Our second argument—strong companies—was equally 
pulling. “Who carries your insurance?” became a 
slogan with us, and by asking the readers of our adver¬ 
tisements, “What do you know about the company car¬ 
rying your fire insurance?” we created a healthy interest 
that resulted in investigations on the part of the insured. 


BUILDING UP A BUSINESS 


37 


Most men feel that the efficacy of the insurance laws is 
sufficient protection, but since the Baltimore and San 
Francisco fires, the business man has learned that the 
records of some companies in the insurance field will 
bear investigation. 

Through advertisements reminding readers of this 
fact, we so aroused the interest of the insured that he 
blew the dust from his policy and learned the name of his 
company. Then he would drop into our office and seek 
our advice as to the strength of the company insuring 
him. When we could conscientiously tell him that the 
company was weak, we did so. When we could not, 
we got the number and date of expiration of his policy, 
and in the end got his business. 

In advertising companies, we did not harp on size 
alone, but tried to show our prospects the individual 
strength of each company. We showed them its stand¬ 
ing and how it was equipped to safeguard them against 
loss. 

We pointed to the age of this company and its un¬ 
impeachable record. We pointed out how another com¬ 
pany had paid out seventy million dollars since 1836 
and how each loss had been paid promptly. 

Offering Service as a Third Factor in the 
Advertising Talk 

Our third bid for business lay in the service which 
we offered. We invited the people of our city to use 
us as counselors in their insurance matters. We would 
gladly show them how they might lower their rate, in¬ 
form them as to the best kind of insurance to carry; in 
short, we offered to the general public the most exten¬ 
sive service we were capable of performing. 

That the city saw fit to place a part of its insurance 


38 ADVERTISING AN INSURANCE BUSINESS 


Vacati on Insurance 

Don't forget to insure your household furniture 
before you go on your vacation. 

We can give you prompt service iu the safest Com¬ 
panies at the lowest rates. A fire might wipe out the 
savings of years and leave you where you started It 
costs only |2.50 to insure for $500 for three years or 
13 75 for five years 

“Better Bdnsured Than Sorry" 
Powers & Powers Fire Insurance 

211 Moody Street. [’hone 609-1 

Reproduced newspaper advertisement which pulled business by taking advantage of a 
general summer exodus—an example of advertising to a distinct class 

on public buildings with our companies—after an in¬ 
surance mayor had investigated the whole subject thor¬ 
oughly—was also given publicity through the papers. 

All of this advertising, however, was more or less 
general. We had made no specific appeal to a class of 
prospects. Household insurance seemed to be a line not 
hard to get and one which offered plenty of room for 
educational work. Almost every man who owns a build¬ 
ing carries insurance on it. But there are scores of per¬ 
sons in every town owning valuable furniture who would 
lose every dollar of it if their houses burned. In open¬ 
ing a campaign for this class of business we took advan¬ 
tage of a peculiar local situation. 

A large local manufacturing concern gives its em¬ 
ployees a two-weeks’ vacation each year, and nearly all 
of them go away during this time. Obviously the fire 
risk is greater than it would be if the employees went at 
different periods during the summer—a few at a time, 
with the majority at home. Our argument was, “Is it 







BUILDING UP A BUSINESS 


39 


worth the worry to go away and leave yonr worldly 
possessions unprotected, when for $2.50 you can insure 
$500 worth of them against fire for three years?” Many 
of these employees did not realize how little household 
insurance costs, and we found many of these who con¬ 
sidered it worth $2.50 to cut out the worry. 

We called this “vacation insurance,” and sought to 
show our prospects how a fire might wipe out the savings 
of years and leave them where they started. By insur¬ 
ing their property we assured the peace of mind of the 
vacation seeker. 

Dressing the Advertisement to Fit Local Conditions — 
Making the Appeal Personal 

Fires, fire alarms and fire losses, were all given pub¬ 
licity when the danger of being burned out was upper¬ 
most in every man’s mind—immediately after a local 
fire or a conflagration of national importance. 

The booming of a fire bell on a still night stirs the 
pulses of everyone, and the day after a fire we aim to 
have our advertisements contain paragraphs like the fol¬ 
lowing : 

“No alarm of fire can disturb your peace of mind if the prop¬ 
erty you own is fully covered by insurance written by us. It takes 
so little money to keep a policy in a good reliable fire insurance 
company that one cannot afford to run the risk of remaining un¬ 
protected. ’ * 

When a fire occurred, and the owners were burned out 
of home or business, as they so often are, our advertise¬ 
ments read something like this: 

“BURNED OUT! There is a world of pathos in these words 
—they may mean loss of house and home, or perhaps a place of 
business from which many families obtain a livelihood. But, there 
comes a second thought—perhaps the burned home or business 
place was insured in one of our companies—in that case, the loss 
i9 promptly paid .' ’ 


40 ADVERTISING AN INSURANCE BUSINESS 


“FIRE LOSSES? They are always heavy, and heaviest 
usually on those who can least afford the loss. Does the lesson 
of yesterday’s conflagration appeal to you?—another fire today 
or tomorrow may wipe out your resources—it cannot wipe them 
all out if you are insured in any one of our reliable companies.” 
The other advertisements, the copy of which exerted 

strong pulling power, read: 

“After the fire, what then? Will a complete loss by fire pre¬ 
vent you from taking up your life as it was before? Will you be 
embarrassed because of the expense of rebuilding? One of our 
reliable policies is the answer. They prevent worry day by day 
and permit prompt rebuilding when the fire comes. ’ ’ 

i 1 Fire insurance is one of the main considerations in your busi¬ 
ness. The firm with whom you should insure is the firm giving 
the best service. Our service is of this class. In addition we 
represent only standard companies—celebrated for fairness, and 
with unimpeachable records for prompt payment of claims. ’ ’ 
These are only examples of how we took advantage of 
every local situation for advertising our business. 
Prompt settlements, testimonials from clients, the 
Fourth of July, Christmas trees, dry spells and moving 
seasons, were all used as subjects for advertisements. 

These advertisements were all made distinctive with 
the mechanical assistance of the printer, and were of 
various sizes as the occasion seemed to demand. With 
every advertisement we made an effort to arrive at cer¬ 
tain definite results. We analyzed our field carefully, 
noting its peculiar features, and took advantage of local 
conditions. Although an innovation in this locality, we 
have found fire insurance advertising practicable. 



Be Opportune 

DVERTISING must fit times and 
places—seize upon live interests. 





CHAPTER VI 

Advertising Schemes That Win Clients 

BY A. E. OLSON 

Manager Insurance Department, Woodlawn Trust & Savings Bank 

To pave the way for securing new business and to 
retain the old are the two objects of the advertising 
schemes of the fire insurance agency. Schemes are of 
two general classes: (1) those prepared by the companies 
and sent to their agents for distribution, and (2) those 
prepared by the agent himself. As a rule, the latter are 
the better, for in them the agent exhibits his own per¬ 
sonality. 

To retain old business and secure whatever additional 
patronage the client may have to offer, the agent depends 
largely on the satisfaction derived from his service. He 
supplements service, however, with cards, statements of 
the companies in which the client has policies, and other 
advertising material which keep the name of his agency 
before his client and provide a lead for renewals and 
additional business by focusing the client’s interest on 
the agency. 

The schemes which show the most originality are those 
used in making an effort to secure new business. It is 
with these that the agent tries to reach the uninsured, 
the elsewhere insured, and the under insured—friends, 








41 









42 ADVERTISING AN INSURANCE BUSINESS 


Parlor B. 

No. 

Articfe 

Oat* of 
Purchase 

Cost 

'Ofcsu-fpUotv 


Carpet, 


i 





Chairs, 








Clock. 








Couch. 






- * ' 


Curtains, 

j 

i 





' 

1?^-socks. 








Jardiniere?, 







. 

Latrp-,, 








Mirropft, 








Piano, 


— 

— 


I 


Stool and Cover. 



rear Fir;- 

After a deiw'ustiva fire 
)i ;• burglery* isu *111 pet "br".’.- 
• ,v ip; ,ie : to -wh&t yon h*&*. 

uoles s you' have an .tnve^tory n&d# 
hf-rom t,h« losa. 

■■. Fi.1I out : the scolosed bock, ; 
: ahd akva yoxrself n Xot of trouble 
abi rofry later. 

r j.. • .««.>,• r-vrifi 

*Ia8uraiica That protect a", I rl.U 
r /t,; u- r..r.r rr-n 


Library 

1 

N<v 

ArtkH 

Out* of 
Pyrtfunt 

Cort 

Description 


Dock*.* 








Bookcase, 








Book -h ciders, 








Brtc-a-brac,* 






.. • 


Cat pets, 






V ; 


Chairs, 






•; '•> 

— 

Clock, 







Curtains, 








i*i stares. 

















.JM- J'MR, 


■ 


-> .... ,-• 








Two pages from the residence inventory, and a facsimile of the letter which one agen t 
mails with each booklet. On these pages the policy-holder pre¬ 
serves a complete list of his property 


acquaintances and strangers. He attempts with one 
scheme to secure more names and expiration dates than 
he could gather in a month of canvassing, and, if the 
scheme is well conceived and handled, he succeeds. 

An advertising scheme which has been most successful 
among fire insurance agents is the issuing of a blank 














































































ADVERTISING THAT AVINS CLIENTS 43 


book for use as a residence inventory. This is usually 
a neatly prepared booklet of a dozen pages. 

The Residence Inventory—A Scheme That Wins the 

Interest of Prospects 

On the inside of the front cover is a notice of what 
to do in case of fire, instructions for making an inven¬ 
tory and appraisal, and on the opposite page are lines for 
the dates of the original inventory and three revisions. 
On the inside of the back cover are printed general in¬ 
structions for placing insurance, how to give a notice 
for additional insurance, and what to do in case of re¬ 
moval of property. The twelve pages of the book are 
each devoted to a room and are ruled to show the num¬ 
ber of articles inventoried, and a memorandum of each 
article itself, date of purchase, cost and description. 

These inventories cost from six to seven cents apiece 
if they are gotten up in attractive style and, therefore, 
they should not be carelessly mailed. With each inven¬ 
tory it is wise to enclose a personal letter, short and 
briefly describing the use and purpose of the booklet. 
Most men have little idea of the value of their house 
furnishings. But with an inventory such as this, they 
are enabled to list their property in convenient form. 

A Key Ring Scheme That Brought Prospects 

to a Bank 

The check on the value of this advertising is readily 
afforded the agent by the personal follow-up, which is 
necessary in all advertising of this kind. Agents who 
have used these inventories year after year find them 
one of the most effective means for reaching, interesting 
and keeping in touch with new prospects. 

Another clever advertising scheme is being success- 


44 ADVERTISING AN INSURANCE BUSINESS 


fully used by the insurance department of a Chicago 
bank. The aim of this scheme is to enlarge the bank’s 
list of prospects, and to provide a means of getting in 
contact with them. The bank has a carefully selected 
list of propert}^ owners, to some of whom it is constantly 
mailing a folded post card, informing the prospect that 
a handsome German silver key ring will be given him if 
he will return the other part of the post card in person. 
When the prospect comes to the office with his card, the 
agent not only makes a new accpiaintance, but usually 
secures a list of expirations as well. 

The manager of this insurance department had pre¬ 
viously attempted to meet prospects and secure expira¬ 
tion dates by a house-to-house canvass in the day time. 
This had proved unprofitable, however, for the man of 
the house was usually absent, and his wife knew nothing 
of the insurance. With his “key ring” scheme he has 
greatly enlarged his list of prospects. 

How Conventional Mediums Can Best Be Used by 

the Agent 

By a proper use of desk pads, company statements 
and cards, the agent may often secure a large response 
from prospects; and, as usual, with the exception of 
statements of companies, it is best for the agent to use 
his individual advertising ideas rather than trust to the 
material sent him by the companies, on which his name 
appears in small type at the bottom. 

A very serviceable scratch pad sent out by a large 
Western agency is 7x4 inches in size, and printed on a 
fair quality of yellow paper. At the top of each sheet 
is the agency’s telephone number and the slogan “The 
best is the cheapest.” Between these, and staring the 
prospect in the face from day to day, is the question, 


ADVERTISING THAT WINS CLIENTS 45 


“Is your insurance in the best companies you can get? 
If not, call on us.” This is not a remarkably clever 
scheme, but is an example of what the agency must ad¬ 
vertise, and how it may make its appeal. 

Cards sent out by advertising agencies are of two 
kinds: one renders a service of some kind; the other 
states specifically what the agency has to offer. For 
instance, some agencies send out an artistically printed 
card, stating what to do in case of fire, and the next card 
may give specific rates on household goods for the terms 
of three and five years. When you send the uninsured 
prospect a card reading, “Do you realize that your 
household furniture or dwelling can be insured for $500 
for three years for $2.50?” you have reached his point of 
contact—his pocket book. By asking him if it is worth 
$2.50 to cut out the worry of three years, you have put 
up to him your best selling argument. 

Some agencies send out cards upon which are printed 
short testimonial letters. Others have pictures of recent 
fires in the neighborhood; and one agency, which de¬ 
sires to show the strength of its sixteen companies, has 
printed on the reverse side of its business card in black 
and red ink. the individual names of the various 
companies, and the cash capital, assets, liabilities, and 
policyholders’ surplus of each, in the order of their 
magnitude. Many companies furnish their agents with 
statements showing the assets and liabilities for certain 
periods of the fiscal year. These are valuable to send to 
clients who are insured in these particular companies. 

Using Company Statements to Back Up 
Personal Claims 

It is often a good scheme to enclose statements with 
personal letters to prospects whom you have been solicit- 


46 ADVERTISING AN INSURANCE BUSINESS 

ing\ Thej r back up the statements you yourself have 
made about your company and serve as a valuable fol¬ 
low-up. The most valuable material, however, is always 
that which bears the agent’s name, emphasizing the 
service and companies which he has to offer. 

The renting journals which are published from time 
to time by real estate agencies, offer a practicable 
medium for the fire insurance advertiser. These book¬ 
lets are read extensively by the movers in the spring 
and fall. And at these seasons they are probably in a 
better mood to talk insurance than at any other time of 
the year. 

After a Fire—The Logical Time to Talk Protection 

to Prospects 

Immediately after a fire, when the fear of a similar 
fate is uppermost in every man’s mind, is the moment 
when an eastern solicitor feels that he has the best chance 
of securing new business. It is impossible, personally, 
to approach many prospects in the neighborhood of the 
fire at that psychological moment, and therefore he has 
enlisted an assistant in the shape of a form letter. The 
form letter is planted on his stationery, and enclosed in 
a flaming red envelope with the word “FIRE” on the 
outside. The letter reads something like this: 

“Dear Sir: Would you like to lose the home or business which 
you have labored for all your life? This will be the plight of the 
man who had the fire in your neighborhood last night, if he was 
uninsured, or if he was insured in a company which will higgle 
over technicalities and go to the court to cut down the obligation 
which they justly owe. If you are uninsured, you had better see 
me when you come down town this morning. Tf you are insured, 
I advise you to look up the standing of your companies. Men 
protect themselves before a fire, not after. Do you know that I 
have not had a disputed settlement in 25 years?” 


ADVERTISING THAT WINS CLIENTS 47 


If a fire occurs in a certain section of the town in the 
afternoon or evening, the agent sees that several hun¬ 
dred of these letters are put in the mail boxes of near-by 
residents that night; the next morning the prospect gets 
this letter before he goes down town. This is one of 
the best advertising schemes that the fire insurance 
agent can use and has greatly increased the patronage 
and reputation of the agent who originated it. 

How One Agency Won Interest Through Window 

Displays 

Possibly you have never heard of a “Fire Insurance 
Window,” but another eastern agency with an office on 
the ground floor, has found window displays as effective 
as a milliner’s array of “Paris Creations.” The proprie¬ 
tors of this agency print their own cards and keep the 
window fresh with them. From time to time miniature 
houses are built of these cards. By cutting the letters 
out, pasting red paper behind them, and placing a light 
on the inside, they produce a graphic feature of their 
business. These houses are set upon a revolving stand 
and kept moving. The window is backed up on the floor 
and sides with other cards of like character, and alto¬ 
gether attracts much favorable comment. These agents 
testify that they have actually secured much new busi¬ 
ness by the power this window has of drawing prospects 
into the office, where risks are written over the counter. 

In whatever advertising the fire insurance agent may 
do, it is well again to emphasize the fact that he should 
seek to individualize his agency. While he gives pub¬ 
licity to the companies he represents, he finds that much 
of the literature given him by the companies fails to 
reach the prospect as well as does the individual matter 
which he prepares himself. All of this advertising 


48 ADVERTISING AN INSURANCE BUSINESS 


should have his name conspicuously displayed in some 
manner. Frequently it is well to adopt a certain 
slogan and conventional trade mark which will always 
identify the agency. And finally, all the “copy” which 
appears in his advertising should be unique in concep¬ 
tion and artistic in design, for these are the elements 
which raise him from the commonplace upon a plane of 
his own making. 


Advertising 

DVERTISING does not necessar- 



ily mean the magazine page or the 
daily newspaper—the billboard or the 
desk blotter. It does not always mean 
selling talk or insurance company sta¬ 
tistics. It has a meaning as wide as 
man’s ingenuity. 

Indirect advertising—gripping op¬ 
portunities, reading human character, 
stamping individuality upon men’s 
minds at the right moment in any one 
of a thousand ways that cleverness has 
suggested or will suggest; this is the 
fire agent’s best advertising—this pays 
the dividends. 




CHAPTER VII 

Calendar Scheme That Brought Results 

For years business men have passively received the 
calendars and blotters of the insurance companies. They 
have considered them as a cog in their office machinery 
and have seldom given them a second thought. The red 
and blue picture of Washington crossing the Delaware 
has excited a patriotic interest, but the agent who sent 
the calendar is forgotten. Similarly, the blotter with its 
maze of statistics is overlooked. If the agent expects to 
use these mediums for advertising, he must be unique 
and artistic in his conceptions. Thus reasoned a dis¬ 
cerning Chicago agent. 

Seeing Faults in Insurance Advertising and 
Finding Remedies 

Realizing the futility of the kind of insurance adver¬ 
tising which he saw going on about him, he sought some 
medium which would really arouse the prospect. And to 
do this, he knew that such a medium must have three 
features: (1) it must individualize the agent; (2) it 
must be so useful or artistic that it is sure to reach the 
prospect; (3) it must continually hold the prospect’s at¬ 
tention. After some analysis, he concluded that a cal¬ 
endar was, at least, one medium that would continually 


49 


















50 ADVERTISING AN INSURANCE BUSINESS 


hold the attention of the prospect. With this settled, he 
prepared to put in the individuality and utility elements. 
Four years in succession he produced such a calendar. 
Today his name is a synonym for fire insurance in the 
thirty-six wards of Chicago. 

The calendar was of large wall size, 21x23 inches, mak¬ 
ing it a useful adjunct to the office. He individualized 
it by allowing only his name to appear at the top; no 
mention of specific companies was made. But the strik¬ 
ing feature of the calendar was supplied by the snappy 
insurance information which appeared on the blank 
spaces of the overlapping monthly sheets. It was fire 
insurance information of vital interest to the insured. 
His statements crystallized such problems as the blanket 
and co-insurance clauses. They compelled attention. 
Each month, as the pages were torn off, a new fire insur¬ 
ance thought was exposed, to stare at the prospect for 
another thirty days. 

This agent has been using such a calendar with some 
alterations for years. Last season, however, he tested 
his scheme by failing to issue it, and by February he was 
literally besieged with telephone calls and letters inquir¬ 
ing for the calendar. He says he cannot afford to miss 
issuing it again. 

Pulling Individuality out of the Mire of the 

Commonplace 

You may say that this calendar, so far, is no different 
from hundreds of others which you have seen. In re¬ 
spect to size and general appearance that is true. What 
make it distinctive and hard to forget are the little 
paragraphic sayings which appear on every sheet 
These are the kernel of the idea. They set this agent 
and his calendar in a class by themselves, while com- 


AN EFFECTIVE CALENDAR SCHEME 51 


petitors were all grouped together. For this reason, the 
calendar can best be described by quoting typical sen¬ 
tences. Here are a few of the sayings as the prospect 
read them on the calendar from month to month:— 

f 

“If we could foresee coming events, we might avert financial 
loss and contingent evils in prospect. Therefore, by proper in¬ 
surance we place this beyond jeopardy. ’ 7 

“We exercise the utmost care to construct a perfect insurance 
contract. The best company in the world can make no satis¬ 
factory settlement on an imperfect agreement. If the conditions 
and facts are properly expressed in the policy, that constitutes 
perfect indemnity and will bring prompt and equitable adjustment. 

Solving the Big Problems of Insurance in a 

Few Sentences 

References to the agent himself are well made and are 
sandwiched with specific information which does not 
refer to the agent whose name appears at the head of 
every calendar sheet. His statements are concise and 
treat features of insurance which always annoy the in¬ 
sured : 

“A blanket policy on property in two or more locations is gen¬ 
erally more satisfactory than specific writing; inasmuch as the 
shifting of property from one to another location will not over 
or under insure you in any location.’ , 

“Loss from sprinkler leakage, crippling of refrigerating plants 
by contiguous fire, the loss of rents or unexpired term of licenses 
are consequential damages and must be separately insured. 77 

“If a building is mortgaged or on leased ground; occupied 
for more hazardous purposes than stated in the policy; if there 
be other insurance; if there are proceedings to foreclose pending; 
or if it contains any of the lighting products of petroleum and 
other explosives, the policy is void, unless permission is expressed 
therein. 77 

When the agent said on his calendar, “We will make 
you a concession of ten per cent,” his competitors were 
up in arms. They thought he was breaking the rules 
of the Underwriters’ Association. But he told the 


52 ADVERTISING AN INSURANCE BUSINESS 


merchants who inquired, that the discount took effect ‘ ‘ if 
you insure a manufacturing or ordinary building to its 
full value.” 

A purely mathematical conclusion which appeared on 
the calendar, and which aroused enough interest to pull 
prospects into the office, was: 

“A brick dwelling can be insured five hundred and thirty-two 
years for a sum equal to the sum insured. ’ ’ 

Pulling Prospects into the Office by Arousing 

Their Curiosity 

The calendar sheet which aroused the most curious in¬ 
terest and which caused widespread speculation was the 
recital of nine strange experiences which he had had dur¬ 
ing his career. Some of the quoted experiences were so 
weird that many prospects could not rest until they had 
telephoned the agent, asking him for explanations. One 
man said he had tried to put the strange statements out 
of his head for a month; but he finally yielded to his 
curiosity by going to the agent’s office for information. 
From this source alone, the agent became acquainted with 
nearly a hundred new prospects and is now writing in¬ 
surance for many of them. Here is the recital which 
caused so much discussion, just as it appeared on the 
August sheet of the calendar: 

“We insured a barn for three years which was never con¬ 
structed; another while it was afire (and the loss was paid); a 
house not owned by the insured, and the loss paid to the right¬ 
ful owner; a house which burned and the loss was paid promptly, 
but we had to sue the insured for the premium subsequently. We 
settled a loss which proved later to be the loss of another com¬ 
pany. We insured an $800 Steinway piano in a $300 house; three 
horses in a barn containing many others and the insured ones 
were the only ones saved from the fire; a consignment of whiskey 
in bond in Louisville for several years which burned three days 
after removal, uninsured. We paid for a house on Lexington 


AN EFFECTIVE CALENDAR SCHEME 53 

Avenue which was set afire by the owner to burn his neighbor 
out of a home. ” 

Some of his advisory statements took this form:— 

“ After a fire you should proceed precisely as if you had no in¬ 
surance. Clean up the premises and property to prevent further 
loss by theft or otherwise, retain damaged goods for evidence and 
report the loss to your agent or company forthwith. ’ ’ 

44 To insure in excess of the value of property is a waste of money, 
as deception and sentiment make no inroad upon an expert insur¬ 
ance adjuster.” 

“The possession of a policy is prima-facie evidence of insur¬ 
ance, but to be fair with the recording agent the insured should 
pay the premium as promptly as he invites the company to settle 
a loss.” 

4 4 The property of others in your possession is not insurable by 
you unless you are liable by contract for such other property.” 

‘ 4 A party furnishing you a policy signed by another is treated 
in law as your agent and not that of the company.” 

4 4 In household furniture insurance, an invoice or list of the 
goods shall be made and kept. This will enable the insured to 
prove fully and expeditiously what is lost or damaged. ’ ’ 

Enlivening the Calendar with Humorous Information — 
Defining Kinds of lyisurance 

The calendar information, while at all times appro¬ 
priate, was often more or less humorous: 

44 Juno, who is the godmother of this month, was one of the 
mythological humbugs who protected married women of antiquity; 
in modern times the property owner looks for protection to a 
policy from Math. ’ ’ 

“Nero, to illuminate the arena, set fire to his slaves, after sat¬ 
urating them well with grease. We celebrate the 4th by fireworks 
and the Math policies stand the loss for the damage. ” 

Blanket and co-insurance, the most subtle phases of 
fire insurance, are spoken of every few months on the 
calendar: 

44 Insurance on buildings, furniture, fixtures, tools, vehicles, 
merchandise, machinery, grain, consequential damage, leaseholds, 
rents, licenses, live stock and mortgaged interests can be effected 


54 ADVERTISING AN INSURANCE BUSINESS 


by specific, blanket or (except as to buildings) by floating con¬ 
tracts. * 7 

‘ ‘ Insurance which under one sum, covers separate or distinct 
buildings or their contents, is blanket insurance. Insurance cov¬ 
ering, on or in each building, a separate and distinct sum, is 
specific insurance. 77 

11 When a rate is promulgated upon the basis of carrying a cer¬ 
tain amount of insurance, and the policy so expresses the per¬ 
centage, the insured becomes a co-contributor to the extent of 
the deficit of the sum required to be insured . 7 7 

This calendar scheme is an example of the kind of ad¬ 
vertising which the fire insurance agents find effective. 
It eliminates the objections of the old style of publicity 
and by its uniqueness of conception individualizes the so- 
called calendar advertising. Its greatest advantage lies 
in the fact that the insurance agent’s name and service is 
kept constantly before the prospect. 


A Gentle Reminder 

W HEN you want a prospect, keep 
on his trail; when you get one, 
don’t let him forget where he belongs; 
when you lose one, go after him—and 
his neighbor. 

Keep after them! Nudge them! 
Remind them! Gently—cleverly—with 
a token that shows you are above 
ground, writing insurance, remember¬ 
ing them kindly. In the ways that 
excite appreciation, not offense. 

But above all, don’t lose sight of your 
client! Don’t let him forget. 



Part III 


HOW TO SELL FIRE 
INSURANCE 



An outline of insurance salesmanship, showing the steps of a sale, from getting 
in touch with the prospect to securing the policy 

















































































































Be on the Ground 


A ggressiveness is what sells fire 

insurance. The agent with the full 
policy register is not always the man with 
the best companies, the most friends, the 
greatest property interests. But he is 
the man that goes after the business. 

Others may have rates as good, protection 
as secure, but the man on the ground 
gets the clients. 

Search out new prospect possibilities, 
follow them up, put your proposition. 
The fact that you are there with the 
application is your best argument. 

The policies that hunt you up won’t pay 
the rent. And the first agent on hand 
generally gets the others. 

Every man knows the need of insurance. 
The agent who gets after it, writes it. 








CHAPTER VIII 

Getting in Touch with Prospects 

BY BRUCE B. STITT 

Insurance Manager, L. M. Smith <& Brother 

In soliciting fire insurance, whether with strangers or 
friends, it is the approach which paves the way for suc¬ 
cess or failure. The approach may be an introduction 
of some sort; it may be the concise statement of a 
stranger with a business proposition; or it may be a 
meeting resulting from an advertising campaign. In 
any case, to he effective, the approach must put the 
agent in close contact with the prospect where he will 
stick until all possibility of securing the risk is gone. 

Whether this approach w r ill be by an introduction, or 
without, the solicitor must decide for himself. The fact 
of the matter is, however, that it makes little difference 
whether the solicitor is introduced, or presents himself 
and his business at the same time. In fact, the agent 
who is pushing the business feature strictly, will often 
find that he can go ahead to better advantage without an 
introduction. 

But before the solicitor begins an extensive campaign 
for new business, he should prepare two aids which are 
positive necessities for systematic and successful can¬ 
vassing. The first is the card index of prospects as de- 


57 








58 


SELLING FIRE INSURANCE 


scribed in the third chapter, and the second, a book of 
prominent persons whom you have insured. 

This book, filled with the names of prominent men in¬ 
sured in your company, should be your constant pocket 
aid. The names are best arranged in the book alpha¬ 
betically under subdivisions of factories, stores, profes¬ 
sions and so on. Thus, when a prospect asks you whom 
you have insured in his place of work, you can instantly 
turn to the marked page, and give him in alphabetical 
sequence a list of all your clients by whom he is daily 
surrounded. This list should be supplemented with two 
or three letters of recommendation from prominent men 
in the community. 

In most instances the approach should be prefaced 
with a thorough knowledge of the prospect and his risk, 
before his business is solicited. In some instances, how¬ 
ever, where the agent desires to come in contact with a 
large number of persons, this preparation must be neg¬ 
lected. 

Making Election a Season for Getting in Contact 

with Prospects 

An Illinois agent moving into a new community, 
wanted to put his name and personality before as many 
men as possible. Accordingly he had printed a digni¬ 
fied card, and with a bundle of them presented himself 
during the spring registration at the office of the largest 
voting precinct in the city. As the men drifted in to 
register he presented his card. He has an engaging per¬ 
sonality, and it was easy for him to get acquainted. This 
precinct was composed largely of merchants, and they 
were impressed with the business-like solicitation of the 
new resident. Later, the agent copied the revised list of 
voters from the registration blanks, checking the names 


GETTING IN TOUCH WITH PROSPECTS 59 


of those men who had recently changed their residence, 
for he knew that they must be the ones he had met. 
These he called upon at their homes and offices, and as 
most of them immediately remembered him and his card, 
he was afforded an easy approach. 

On election day the agent again took up his post at 
the polls, and this time he not only met all the voters, 
but again met those whom he had seen at the registration. 
Thus, with two days’ work, he forced his personality on 
several hundred representative men, the most of whom 
were in business and owned property. Immediately 
after the election, the agent began to canvass the list of 
names which he had secured. So successful was he in 
his bid for business that he resolved to go into another 
precinct at the fall election. 

This time he took a ward of the city where factory 
employees lived. His card was less dignified here, and 
in red letters he had printed, “Better be insured than 
sorry.” Most of these factory workers owned homes or 
furniture, but the agent found many who were unin¬ 
sured. Taking the names of these, he had printed and 
mailed, the next day, another series of cards. This time 
they read: “$2.50 insures you for $500 for 3 years.” 
Other prices were quoted in this specific way. Imme¬ 
diately after this distribution, the agent began a canvass 
of the employees at their place of work and in their 
homes. 

Calling upon Factory Workers—Enlisting the Assist- 

ance of the Wives 

Show a factory superintendent a list of employees 
with uninsured property and you can usually secure ad¬ 
mission to the plant for solicitation. Any manager ap¬ 
preciates the benefits to be derived from an enlightened 


60 


SELLING FIRE INSURANCE 


employee. Moreover, fully protected men do not have 
to seek charity when burned out of a home. 

If access to the factory cannot be gained, the agent 
has an alternative that after all may be more effective. 
With his list of factory prospects he calls at their homes 
during the day, explaining the proposition to their wives 
and requesting the privilege of calling at night when 
the head of the house will be at home, surrounded by 
his family. Fear of fire—always present in the femi¬ 
nine mind—leads to permission at once. Almost with¬ 
out exception the agent can write the policy. The small 
cost and the sense of protection are arguments which 
the prospect cannot put aside. Within two weeks, the 
agent who originated this scheme had written one 
hundred new risks which are still on his books. He has 
followed this plan every spring and fall, and has found 
it a successful means of introducing himself to prospects. 

Insuring Young Mechanics and Bachelors—Looking 

into the Future 

In meeting factory workers, it will often be found 
that mechanics owning their own tools seldom have them 
insured. Usually they are expensive, and are left in a 
building, the owner of which has made no provision for 
protecting the tools of his workmen. While the premium 
on such risks is insignificant, the writing of it slips in 
a strong wedge for new business. If the mechanic is 
single, additional business is represented in his possible 
marriage, which necessitates furniture and an uninsured 
home. 

Prosperous young bachelors living in private apart¬ 
ments are also a source of business. Usually the pros¬ 
pect will have $500 or $1,000 worth of personal effects, 
which is a good risk and one easily insured. And it also 


GETTING IN TOUCH WITH PROSPECTS 61 


serves as a lead for more business should the client 
marry. 

A Chicago solicitor, through his clubs and friends, 
met six unmarried men each of whom had at least $500 

i 

worth of uninsured property in his rooms. He insured 
their property, and at Christmas sent each one a paper 
cutter, with a personal letter stating that he appreciated 
their patronage and that he would be grateful for a kind 
word among their friends. A month later the insurance 
agent had thirty unmarried men on his books instead of 
six. 

Since then some of these have married; others have 
gone into business for themselves. Naturally, they in¬ 
sured their homes and additional property with the man 
who had had the initiative to look them up while they 
were single. This canvass among young men has proved 
to be one of this agent’s most successful selling efforts, 
and he is making plans to extend this held of prospects. 

Keeping an Ear to the Ground—Making Gossip 

Pay Dividends 

It is not impossible to enlist the co-operation of the 
family in providing a means for meeting new prospects. 
A New York solicitor living in a suburb, had his wife 
looking up business while he was at work in the city. 
Arriving home at night she would tell him that she had 
seen men excavating for a cellar at this place and sur¬ 
veyors at work in another. Often she had the names 
of the owners, builders or contractors; and with or with¬ 
out these, the young solicitor would start out after sup¬ 
per on a quest for the new business. 

When prospects are found by cop^ying the marriage 
licenses and mortgage and loan notices, it is good form 
to write a short personal note to the prospect the day be- 


62 


SELLING FIRE INSURANCE 


fore calling. It gives dignity to the introduction and 
starts a trend of thought toward the writer. If the 
agent thinks some live competitor will beat him and his 
letter, then the best way is to make a personal call with¬ 
out delay. 

This is also true of solicitation succeeding a fire. 
Some agents, it is true, solicit nearby residents the same 
day, but a dignified approach is more effective. 

Of course, in many of these schemes, a large part of 
the first commission is absorbed, but the fire insurance 
agent could well afford to lose it all. It is the steady 
renewal of expiring policies which provides him with 
revenue. If this revenue is to grow in magnitude as the 
agent grows older in the profession, he must constantly 
be alert in meeting prospects. While the methods de¬ 
scribed are used most extensively by the young solicitor 
in building up his business, they are practicable for any 
agent and suggestive of the radical means necessary to 
pull an agent out of the commonplace field. 


Strike Your Gait 


A MAN may be quick—smart; may 
have good address; may know 
his line. But he never will sell insur¬ 
ance unless he gets out and digs. 

The one absolute essential of insur¬ 
ance salesmanship is to hustle—and to 
do it every day. 




CHAPTER IX 


Following up Prospects 

BY JOHN MOREY 

General Insurance Agent 

New business is seldom secured at the first call. Nor 
is it usually written at the second or third. Fire in¬ 
surance agencies are built up by keeping everlastingly 
at it—by attacking each prospect from every angle and 
not giving up hope until every means has been used 
to catch the risk. 

The solicitor’s follow-up consists of direct and in¬ 
direct solicitation. Direct solicitation implies personal 
calls, hearty hand shakes and stimulating arguments. 
Indirect solicitation, on the other hand, implies nothing 
more personal than letters, circulars, calendars, blotters 
and the miscellaneous forms of advertisements. 


Making the Prospect and Expiration Files Do Your 

Detail Work 

While these advertisements will suffice, to a certain 
extent, in attempting to secure additional business from 
the client, the prospect must actually be seen. He is 
the target for the agent’s best selling talk, and it is 
only by this personal appeal that the solicitor may hope 
to swing new business. Moreover, the successful agent 








64 


SELLING FIRE INSURANCE 


realizes that he must mix the personal and indirect ele¬ 
ments in following up his clients also, for they are 
sources of business as well as the men he has never 
insured. 

To be assured that his personal calls and circularizing 
will be brought forward at times when they will be the 
most effective, the agent needs secondary aids which will 
not forget the details of his solicitation. These are best 
found in the prospect file (described in Chapter III) in 
which are found the names of all prospects, and in the 
expiration file (described in Chapter XI), in which 
are listed the names of all the agent’s clients. 

Now that the agent has his two files, notice how he 
conducts his direct solicitation, using the prospect file 
as a daily aid. Jotting down the names of the pros¬ 
pects whom his file tells him he should see today, or for 
the next two or three days, the agent starts out upon his 
canvass. On this canvass he will find, for instance, that 
Brown is in New York and will not return for a week. 
He notes this and when he returns to the office slips 
Brown’s card behind a guide a week ahead in his pros¬ 
pect file. Or if Smith says he will talk insurance a 
month later when he receives the plans for his new ware¬ 
house, the agent merely makes note of the warehouse on 
Smith’s card and slips it into the file one month ahead 
of the present date. Thus the agent makes the rounds. 
From day to day he shifts the cards to and fro in the 
file until prospects become clients or “dead” names. 

The fire insurance agent realizes that it is this follow¬ 
ing up of every clue that lands new business. When he 
hears of possible risks he notes them, if vague, in his 
clipping file and, if specific, in his prospect file under 
the owner’s name. In either case he does not rest until 
he has either secured the risk or proved to himself that 


FOLLOWING UP PROSPECTS 


65 


it is impossible to secure. Every man he meets—he can¬ 
not meet too many—represents potential business. The 
agent learns if his prospect is, or is about to be married, 
if he is in business or expects to be, if he owns property. 
In short, he learns everything possible about the pros¬ 
pect, and then goes after his business and sticks to it. 

Soliciting a Prospect for Five Years—How Persistence 

Won a Target Risk 

It is this persistence that wins. 11 1 canvassed one pros¬ 
pect for five years,” said a big underwriter, “before 
I secured any of his risks. When I first met this man 
it seemed hopeless for me to expect any of his busi¬ 
ness. His brother-in-law was an insurance broker and 
had placed his insurance for years. I told the prospect, 
however, that while I didn ’t wish to be rude, I intended 
calling on him every two months and that sometime he 
might be able to give me some of his risks. I did this 
for five years, and at the end of that time the prospects 
for doing business were still apparently hopeless. But 
I had put so much energy into this canvass that I could 
not afford to drop the prospect. A few months later he 
called me up and gave me two expired risks. His 
brother-in-law had gone out of the business and the 
other day when he transferred his last risk to me he said 
my gentlemanly persistence had won. The risk was a 
large one and well worth the effort.” 

In following up new business, the solicitor will find 
that he must make one customer lead him on to another. 
For instance, a Chicago agent was making a specialty 
of the produce merchants and printing offices. By secur¬ 
ing introductions and testimonials, this agent, with the 
expert knowledge gained of these two lines of activity, 
found in time that he was carrying more risks on pro- 


66 


SELLING FIRE INSURANCE 


duce and printing establishments than any other insur¬ 
ance man in Chicago. His customers in the produce and 
printing businesses were often receiving additions to 
their stock, and by being constantly on the job, he got 
the business. 

Paper Salesman—The Vanguard of the Fire Insur¬ 
ance Solicitor 

But it is apparent that an ordinary man cannot fol¬ 
low up all of his business himself. He must employ 
some help, and outside of personal assistance the mail 
bag is the best substitute. Into the bag are put all kinds 
of advertising messengers to be mailed to two classes of 
prospects. The mediums most used by agents to follow 
up business are notices of expiration, personal letters, 
circulars, blotters, calendars, and advertising novelties. 
These should be sent to those prospects whom the agent 
has not yet insured and to his clients from whom he is 
expecting additional business. 

The time for sending out the mail is often more im¬ 
portant than the matter itself. If sent just any time and 
from any list, the whole mass of expensive material 
might as well be thrown into the waste basket, for that 
is sure to be its final resting place. First, then, the mail 
should be sent out regularly and systematically. Per¬ 
sonal letters and notices of expirations will have to be 
sent out as the contingencies of the business demand. 
But the other material demands systematic considera¬ 
tion. 

One of the largest agents in the west built up and 
holds together an immense clientele through his sys¬ 
tematic mailing lists. He has two of these: one for the 
smaller risks, such as the owners of dwelling and house¬ 
hold furniture; the other for the owners of large busi- 


FOLLOWING UP PROSPECTS 


67 


nesses. Calendars are sent to the names on each list, not 
at the beginning of the year, but in February, when they 
are made up without the January sheet. This method 
insures the calendar a place at least on top of those that 
arrived in January or December. To the man who has 
not yet received one, it conies as a welcome guest. The 
blotters are sent out, three in an envelope, every month 
to the owners of big risks; once every three months to 
the smaller prospects. Experience has shown that three 
a month are used at the desk, but that three every quar¬ 
ter are sufficient for the man at home. The regular mail¬ 
ing of these blotters and calendars has built up business 
for many agents. Prospects grow accustomed to the 
regularity of the receipt of the blotters and from month 
to month count upon them as an element in their desk 
system. 

How a Chicago Agent Uses Blotters to Convert 
Acquaintances Into Friends 

A Chicago man who has been successful with his 
artistic and individual blotters traces much business 
directly through this means of following up prospects. 
He lives in a suburb and is interested there in church 
work. In this way he meets many men in Social gather¬ 
ings. It would be crude for him to mention insurance at 
these times, but he puts these men on his mailing list 
immediately. In time the regular receipt of the blotters 
impresses the prospect and the next time he sees the 
agent he remarks about it. Then the agent tells him 
he would be glad to write his business. This leads to 
securing the expiration dates and in time he has secured 
business from men he would find it difficult to approach 
otherwise. 

It is almost impossible to secure the exact dates of 


68 


SELLING FIRE INSURANCE 


expirations at the first call upon the prospect. He does 
not remember them, of course, and the policies may be 
locked up in a safe down town. The agent can only 
ask for approximate dates and until he becomes well 
enough acquainted with the prospect to ask for exact 
dates, these approximate dates will have to suffice. The 
prospect will probably base his dates of expiration upon 
the time he paid for the policies—sixty days after they 
were written. The agent must base his approximations 
upon this fact. 

Whether the agent is making personal calls on his 
prospects or circularizing his clients, the prospect and 
expiration files are the starting points for all his solici¬ 
tation. Each constitutes a separate calling and mailing 
list which must be treated with distinct attention. If 
they are properly used, much of the drudgery and in¬ 
effectiveness of a haphazard follow-up is avoided. Every 
call marks a forward step in securing a risk, and not a 
stamp is wasted. 


Stick to It 

M EN succeed because they finish 
the task. The initial ietter of 
Insurance Success is Persistency. 

Mistakes may mark you back. Men 
may misjudge you. 

Win in spite of all! Finish the task! 
Persist! Stick! 




CHAPTER X 
Landing the Policy 

Every man who sells fire insurance labors under one 
burdensome handicap—a liberal percentage of his pros¬ 
pects persist in looking upon his commodity as some¬ 
thing to be bought on a friendly rather than on a busi¬ 
ness basis. Nine men out of ten place the responsibility 
of their protection with the first friend who solicits their 
application. 

Yet the simple fact that this condition obtains is no 
reason why the insurance agent must accept it. He can, 
if he handles his prospect right, demonstrate the folly 
of blindly placing so important a thing as insurance 
on a purely personal basis, when every other business 
enterprise which costs him money must furnish sound 
business reasons. 

Restrictions of the Business Can be Turned to Advantage 
—Cutting the Gordian Knot 

Eire insurance, as well as any commercial product, 
can be sold strictly on a business basis. The fact that 
the friendship plea has entered so largely into the buy¬ 
ing of protection in the past does not obscure the more 
important fact that all the elements of salesmanship 
enter into the landing of a policy just as much as they 


69 







70 


SELLING FIRE INSURANCE 


do into the selling of a case of shoes or an office appliance. 

It is true that the fire insurance business is bound 
down by certain restrictions that make it in a degree 
different from other businesses. Rates are the same for 
all agents, companies look much the same to prospects, 
and the fact that practically every property owner 
recognizes the value of insurance offers small chance 
for argument on the general proposition. But this does 
not mean that the agent has no sound basis for an un¬ 
sentimental, straightforward appeal for patronage. He 
can on the other hand turn the peculiar conditions that 
characterize this business to advantage. 

To do this requires tact, of course. More, it requires 
ingenuity, resourcefulness, persistency and above all, 
a thorough knowledge of the companies and qualifica¬ 
tions of himself and his rivals. Many an agent has that 
fatal fault of lacking the ammunition for his close. He 
may be able to get in touch with a prospect and work 
his case up to the very psychological moment for landing 
the policy, then lack the one pound of steam that puts 
the pen in the prospect’s hand, as it were, and prompts 
him to sign the application. 

The Three Points on Which the Agent Should he Certain 

to Concentrate in Closing 

In selling insurance, the argument should be not only 
constructive, but eliminative. That is, not only can you 
show the prospect your own qualifications for writing 
his business, but you can show him that there is no pos¬ 
sible reason why he should give it to any one else. This 
is taking for granted, of course, that you have real quali¬ 
fications to offer him. 

Suppose, for example, that you have in hand a stub¬ 
born prospect who is convinced that he needs protection 


LANDING THE POLICY 


71 


for liis property, but is inclined to favor placing it with 
a rival of yours simply on a basis of friendship. There 
are three things that you can offer this man, three vital 
arguments on which will depend your gaining or losing 
his business. They are companies, terms, service. 

Show him first of all that your companies are of un¬ 
questionable strength. Demonstrate this by statistics 
as to their age, their financial responsibility, their 
records on the occasion of the San Francisco fire or 
some other great disaster. Show him that they have 
never contested a claim or refused a payment—impress 
him with their promptness in settling losses. 

Then go to the matter of rates. If there is any possi¬ 
ble way that you can help him lower his rate, do so. A 
careful investigation of the condition of his property 
will tell you this. But if you can’t reduce his cost of 
protection, at least you can show him that no other agent 
can underbid you. Possibly he does not know that rates 
are uniform. Show him that not even his most intimate 
friend can favor him on this point. 

Then present your third advantage, service. Service 
is the most potent factor in fire insurance. It is the 
phase of the business through which enters opportunity 
for the actual rendering of professional, expert advice 
to the client. Even though you are on an even basis 
with your rivals in other respects, you can, if you will, 
stand superior on this score. Show the prospect your 
service record, concrete instances of how you have saved 
your clients money by giving them counsel in the selec¬ 
tion of companies and forms of policies, in improving 
the nature of their risks, in making adjustments. Give 
the prospect figures and testimonials that will prove 
this. If you have been wise enough to make service a 
feature of your business, you can, by emphasizing it, 


72 


SELLING FIRE INSURANCE 


make your agency stand out distinctive among all your 
rivals. Put some solid thinking into the real superiori¬ 
ties of your agency, and then talk those points. 

Sizing Up the Prospect Before Summing Up Your Case 
and Driving Home the Final Arguments 

Now, when you have presented these three phases of 
your proposition, size up the prospect. Possibly he may 
still hang back, reluctant to give his consent. But at 
least you have led him up to the psychological closing 
point—a clinching argument swiftly driven home will 
win him, if you but have it in reserve. Don’t give up 
because he hesitates or is stubborn. 

“Your case looks good,” he may say, “but I think 
I will give my business to Wilson; he’s a good friend 
of mine.” Come back at him then by showing him 
that you are talking business strictly on a business 
basis, then pile up an irrefutable summary of all the 
arguments in your favor. 

“Mr. Stevens,” you can say, “if you were about to 
invest five thousand dollars, would you put it into a 
venture simply upon the recommendation of a friend, 
without first carefully investigating for yourself its 
soundness, its responsibility, its record as a payer of 
dividends ? 

“When you are about to buy a suit of clothes, even, 
do you go to a certain tailor simply because you happen 
to know him personally and say, ‘Here Smith, make me 
a suit of clothes; use your own judgment as to style 
and cloth?’ No, you go to Watson, across the street, be¬ 
cause Watson has proved by demonstration that he can 
give you the best service, the best fit and the best value 
for the money of any tailor in town, and you go to his 
shop and carefully pick out a fabric that pleases you, 


LANDING THE POLICY 


73 


knowing that yonr choice and his ability will give you 
suit satisfaction. 

Place Insurance Before Prospects on a Strictly Business 
Basis—Show the Results of Unreliable Insurance 

“Any other proposition which costs you money, Mr. 
Stevens, you consider of sufficient importance to war¬ 
rant the closest personal investigation. Why not your 
fire insurance, which may mean the salvation of every 
dollar’s worth of your property? Is not a business 
transaction of this importance worthy of consideration 
on its merits rather than purely on the recommendation 
of a friend? 

“See here, Mr. Stevens, I have satisfied you with the 
strength and responsibility of our companies. I have 
demonstrated that no one can give you insurance a cent 
cheaper than we can. Certainly you grant that, because 
the rates are uniform. So far then, at least, I have 
every advantage that others have. Do you think, Mr. 
Stevens, that any other agent can give you a more valu¬ 
able personal, professional service than we can—in see¬ 
ing that your protection is the safest, the soundest, the 
cheapest and the most satisfactorily placed? I am con¬ 
fident that you are satisfied on that point. 

“Then the only difference between our agency and 
any other is this—that ours is the only one with a rep¬ 
resentative on the ground ready to write your applica¬ 
tion. You want insurance. If you wait even until to¬ 
morrow to place it elsewhere a fire tonight may wipe 
out all your ■ property. In my opinion, there is onlj 
one thing, that stands between you and insurance—that 
is a decision as to the kind of a policy you want. And 
if you need any help on that point I think I am qualified 
to help you.” 


74 


SELLING FIRE INSURANCE 


Concentrate in this closing appeal the strongest points 
of every advantage in your favor—show the prospect 
that yours is the hardest kind of a business proposition, 
one that he cannot afford to consider carelessly—elimi¬ 
nate the purely friendship element. Then show him 
that even though you are on an even basis with other 
agents in most respects, the simple fact that you are 
there on the ground is the one great point in your favor. 
In this respect at least, you have not a rival. Make him 
see that he has no reason for giving his business to any¬ 
one else and you have, indirectly but surely, made the 
business your own. 


Prove Your Case 

W RAP your mind about your 
proposition—study your pros¬ 
pect’s needs. Analyze his case. Fin¬ 
ger it over with the tentacles of your 
brain. Concentrate on it so long that 
every wall and door—every possible 
hazard and economy stands out distinct, 
orderly in your mind. 

Then go to the prospect; show him 
that you know your business—and your 
share of his. Prove that in fire insur¬ 
ance you could begin at the sub-base¬ 
ment and fix him safe to the flag pole. 

If you can prove it, you can do it. 



Pari IV 


HOW TO HOLD BUSINESS 

IN LINE 



The opportunities for intensive cultivation of the agent’s field and the arguments 
to use for holding clients in line, are graphically shown here 











































































































Keep at It 

PERSISTENCE wins—and a follow- 
A up system is simply persistence made 
tangible—made automatic. 

Keep after your man. 

He may think that he does not need your 
line. Show him that he does. 

He may hesitate—may put off decisive 
action till “another day.” 

Be on hand today—“another day”—with 
new arguments—new persuasion. 

The hardest rock melts before the drill 
that bites deeper every minute. The 
longest tunnel opens to the three-shift 
and eight-hour day. 

Keep at it! Persist! 




/ 


CHAPTER XI 
How to File Expirations 

To allow a policy to actually expire before the client 
is solicited for a renewal is an unpardonable breach of 
fire insurance ethics. And yet, how often it happens. 
You can recall many instances; if not in your own 
agency, in those of your competitors. Furthermore, 
you know how disastrous such an oversight may be. 
Your client becomes angry, when he learns that he has 
been unprotected, perhaps, for several weeks; and when 
a rival, who has had a memorandum of this expiration, 
asks for the business he usually gets it. The only excuse 
for such lapses lies in the fact that the agent making 
these mistakes has either an obsolete system for filing ex¬ 
pirations, or no system at all. 

The expiration file consisted for a long time of a so- 
called, “expiration register.” This was a bound book, 
taking care of all policies whether written for a term 
of one year, three years, or five. For this reason, the 
agent was constantly carrying forward, duplicating and 
rewriting policy forms until he ended it all with the 
writer’s cramp. 

The live agent has now turned to the card index, which 
is particularly suited to his purposes. This file is much 
like the prospect file and spurs the agent to watch his 



77 





78 


HOLDING BUSINESS IN LINE 




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NA.ME 


ADDRESS 

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COMPANY 

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POLICY NO. 

AMOUNT 

EXPIRATION 

—- . 

PROPERTY 

month 

DAY 

YEAR 


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Form I: Policy-holder’s index card, providing a quick reference to the chronological 
index for expirations. Clients’ names are arranged alpha¬ 
betically behind guide cards 


clients as carefully as lie does liis prospects. This ex¬ 
piration file has a variety of forms, but the basic prin¬ 
ciple of chronological indexing is the same. 


The Card Index for Expirations—An Infallible 

M emory 

The simplest style of the expiration file is made up of 
two forms consisting of a policy-holder’s index card 
and an expiration index card. The card for the policy¬ 
holder’s index (Form I) has spaces for the assured’s 
name and address, and a list of all policies covering a 
property, with dates of their expirations. One of these 
cards is made out for each property insured. These 
are filed alphabetically in a tray, with guide cards, sub¬ 
dividing the alphabet sufficiently to provide easy refer¬ 
ence to each individual card. 

The expiration index card (Form II) gives the name 
and address of the assured, the name of the company, 




























































FILING EXPIRATIONS 


79 


policy number, date of expiration, description of prop¬ 
erty, amount of insurance, premium, rate and term. 
These are all filed by means of a chronological index 
according to the date of expiration. The index consists 
of twelve monthly guides, and daily guides from one to 
thirty-one for the days of the month. In addition to 
the monthly and daily guides there are also used yearly 
guides for the purpose of indexing the expiration cards 
of term business. 

These two sets of cards act as cross indexes to each 
other. If, for instance, Jones wants to know when his 
next expiration occurs, amount of premium and so on, 
you pick Jones’s card out of the alphabetical policy¬ 
holder’s index, note the nearest expiration date, turn to 
the expiration index, and, behind the guide card mark¬ 
ing thirty days preceding Jones’s date of expiration, 
you find Jones’s other card with all the information de- 



FEB. \ MAR. \ APR. \ MAY \ JUNE \ JULY \ AUG. \ SEf>T.\ OCT. \ NOVA^^C. 
TTSr- ^ 2 ^ 24 ^ 26 ^ 28 ^ 1^01 


COMPANY 


ADDRESS 


POLICY NO. 


AMOUNT 


RATE 


TERM 


PREMIUM 


rURNtTURE 

EfUtLDfNG 


STOCK 

MACHINERY . 


- 

LOCATION 



HOW SECURED 

■ 



REMARKS - 


NAME 


Form II: Chronological card index for filing expirations. With daily, monthly and 
yearly guides, expirations are thus automatically noted two 
months before they occur 































































80 


HOLDING BUSINESS IN LINE 


sired. The expiration cards are usually hied thirty, or, 
sixty days ahead of the actual date of expiration so that 
the agent will have time to solicit, by mail or in person, 
a renewal before the policy actually expires. 

Cutting out the Detail by Amplifying the File—The 

Folder Expiration Index 

The second method of filing expirations is more com¬ 
pact, a little more difficult to operate, but involving less 
detail work. In substance this file calls for the filing of 
the applications themselves, making them take the place 
of the expiration card index. 

To every client should be assigned an ordinary folder 
made by folding a half inch beyond the center, a sheet 
of manila paper 8x12 inches. Folded in this way, one 
side of the folder projects a half inch above the other 
side and upon this is written in ink the client’s name. 
This makes a durable pocket into which are dropped 
the copies of the daily report, sent to the home office. 
All these copies of applications are placed in the single 
folder, irrespective of properties or companies. They 
are filed in the folder in the order of expiration so that 
the application first written is always the first to at¬ 
tract attention. 

These folders are fitted into vertical filing cases in the 
same chronological order as the expiration card index. 
This brings into a single compartment of the file all ex¬ 
pirations that occur on any day. The daily, monthly and 
yearly guides are simply squares of pasteboard large 
enough to project above the folders. If several policies 
are taken out on the same property covering different 
periods, the folder is filed according to the first, day of 
expiration. In most cases all policies can then be re¬ 
newed and disposed of at the same time. Otherwise the 


FILING EXPIRATIONS 


81 


folder is advanced to the next day when any policy on 
that property expires. As an index to this folder file, 
the policy-holder’s card index (Form I) is used. It 
must be remembered that in this expiration file as well 
as in the other, “date of expiration” means, to the agent, 
thirty or sixty days preceding the actual expiration. 

Duplicating Reports for the Folder Expiration File — 
Adapting the Index to Your Own Needs 

This system of filing expirations has the advantage 
that it at once provides a means of filing the duplicate 
copies of the daily report and the expirations at the 
same time. No expiration cards have to be made out, 
for the contents of the folder itself contain all the in¬ 
formation required for obtaining a renewal of the policy. 

But it is possible to simplify even more the routine of 
the agent. With the “duplicate daily report” method 
he may not only bring his detail work down to a mini¬ 
mum, but he will insure accuracy as well. 

When a daily report is made out, it may be duplicated 
by means of carbon paper and an indelible pencil—that 
is, if the daily reports are filled out by hand. The stand¬ 
ard daily report is too wide to fit an ordinary typewrit¬ 
ing machine, but it may, by folding, be duplicated in 
two impressions. Make an extra rider for the duplicate 
daily report, if it is desired to keep a rider on the regis¬ 
ter. Usually it is sufficient to fill in the register to show 
merely the number of policy, name of insured, rate, ex¬ 
piration, and similar data. 

By using carbon paper, the labor of main¬ 
taining the files will be greatly reduced. This is 
provided for by having three forms of exactly the same 
size, with the spacing so arranged that an indelible pen¬ 
cil and two sheets of carbon paper transcribe the proper 


82 


HOLDING BUSINESS IN LINE 



Forms III (below), IV and V: The three copies of a triplicate record card. The first 
serves as an expiration notice, the second as a chronological file 
and the third as a cross index to the expiration file 


information upon the three cards at one writing. The 
original slip (Form III) is sent to the policy-holder as 
a notice of expiration; one carbon copy is filed chrono¬ 
logically and the other alphabetically. 

The original form and the two copies bear the name 
and address of the insured, number and amount of the 
policy, rate, term and date of expiration, and location 
of the property insured. In addition to this data the 
original is printed in the form of a post card or letter 
stating that the firm will be pleased to renew the above 
policy to which its name is signed. The original card, 
together with the second carbon copy (Form IV) is filed 
under the date of expiration. A month or so before this 































FILING EXPIRATIONS 


83 


date is reached the original card is mailed to the policy¬ 
holder as an expiration notice and the second copy is 
left in the file. If no reply is received to the first notice, 
this second copy serves as a reminder to the office to call 
the customer’s attention to the expiration of his policy, 
either by mail or in person. 

The third carbon copy (Form V) is filed alpha¬ 
betically as the cross index for the expiration file. This 
simplifying of the expiration system, although the re¬ 
sult of an effort to meet the demands of a large insur¬ 
ance office, may easily be applied to an office that handles 
but a dozen expirations a day. 

Of the two systems—the card index, and the combina¬ 
tion card and folder index—the folder method is the 
best for the small office, but in large city agencies, it 
is often too cumbersome. 

It only remains for the agent to determine which 
method is best suited to his conditions. It is necessary, 
however, for him to use some such infallible method if 
he hopes to hold business, once it is secured. Further¬ 
more, the expiration file is the most important of all 
those used by the fire insurance agent. For it is not 
so much the securing of new business from new pros¬ 
pects that increases his revenue, as it is the steady re¬ 
newal of the old. 


Use Method 

M ETHOD minimizes trouble. It 
facilitates work, it saves time, it 
paves the swampland of business. 




CHAPTER XII 

Selling Additional Insurance 

BY SEDGWICK S. VASTINE 

Insurance Broker 

When an owner lias insured liis property, there are 
four arguments which may induce him to carry addi¬ 
tional protection: (1) co-insurance, (2) blanket in¬ 
surance, (3) a ten per cent discount for certain classes 
of property insured to its full value, and (4) flaws in 
the insured’s policies. “A live agent,” says a Western 
solicitor, “can usually find an opportunity in one of 
these four.” 

But to use these arguments so that they are intelli¬ 
gible to the layman requires more than ordinary knowb 
edge of the fire insurance business. The mathematics 
of the co-insurance clause has long been a stumbling 
block for the agent who, while understanding the effects 
of the clause, has been unable to explain it. For this 
reason many merchants and manufacturers are under- 
insured and, in case of fires, have been contributors to¬ 
ward the loss. Often, too, losses have been sustained by 
the policy-holder because he was protected by specific, 
instead of blanket insurance. 

The ten per cent discount which, according to the dif¬ 
ferent state laws, may be held out to a man insuring 


84 







SELLING ADDITIONAL INSURANCE 


85 


certain properties to their full value, is an argument 
that among certain manufacturers often secures addi¬ 
tional business. Like common flaws to be found in 
policies, however, it is not generally understood. Flaws 
in policies are found by the agent who knows insurance 
from the first principle to the last. 

These agents, however, are rare, for the average in¬ 
surance agent is too much of a salesman. By that is 
meant, he cares more for the actual sale of today than 
the business of the dav after tomorrow. He takes a keen, 
psychological delight in the fine points of a sale; and 
when, at last, he secures the policy, he too often stops 
there, no longer interested. For this reason many fire 
insurance solicitors know just enough about the business 
to make the sale—for they are salesmen. Upon making 
the sale, they slap together some sort of a policy, drawn 
up within the limits of their knowledge—one that will 
pass the clerk in the home office, and that satisfies the 
trusting client. Without a fire, the customer may con¬ 
tinue to be satisfied; but with one, or after a wise agent 
shows him the mistakes he has made, he is alarmed. 

Explaining the Subtle Features of the Co-insurance 
Clause—Putting the Proof up to the Prospect 

Of the four arguments which the insurance agent has 
to offer, that of co-insurance is at once the most difficult 
to explain and the one which will most quickly produce 
business. In making the explanations to the prospect, 
the agent should always use the insured’s figures, having 
previously worked them out carefully at his office. This 
is a precaution that the agent must take, for he and his 
sale are lost if he becomes entangled in a maze of digits. 

The agent should first make the broad assertions that 
the prospect is not sufficiently insured, that he will lose 


86 


HOLDING BUSINESS IN LINE 


money in any kind of a loss, partial or total, and that 
for his insufficient protection he is paying a higher rate 
than he would for full protection. These three state¬ 
ments will usually jar the prospect from his apathy, 
and he will want a more detailed explanation. 

Then the agent should show him that eighty per cent 
has been arbitrarily fixed upon in nearly all the 
states of the Union as the minimum amount of 
insurance which may be carried and upon which the 
companies will pay full value in partial losses. To be 
assured of full protection in partial losses, the insured 
must carry insurance to the extent of at least eighty 
per cent of the total value of the insured property. 
Thus on property valued at $20,000, the insured should 
carry $16,000 insurance. But suppose he figures that 
he will take a chance and insure for only $12,000. The 
only fire upon which he could collect $12,000 would be 
a loss fixed above eighty per cent of the total value. If 
this loss were total, he would lose $8,000. But the large 
proportion of losses are partial, and upon each one of 
these also, the under-insured man will lose money. 

Illustrating the Effects of Settlement for Partial Losses 
on Under-insured Property 

Suppose, continuing the same illustration, there were 
an $8,000 fire. Although the owner is insured for 
$12,000, he will not receive payment for his $8,000 loss. 
The insurance companies have decreed that unless the 
owner is insured for eighty per cent of the total value 
of his property, he will be a co-contributor in case of 
partial loss. That is, he will be an insurer to the extent 
of the deficit, and will bear his proportion of the loss. 
According to the eighty per cent clause his insurance 
should be $16,000. But it is $12,000, twelve-sixteenths 


SELLING ADDITIONAL INSURANCE 81 


of what liis eighty per cent clause requires. Therefore, 
the companies will pay him only twelve-sixteenths or 
three-fourths of his loss. Consequently, with an $8,000 
fire, he will receive only seventy-five per cent of his loss, 
or $6,000, becoming a co-insurer to the extent of $2,000. 
And he remains a co-insurer for any amount up to 
$16,000 (eighty per cent). With a loss fixed at this 
amount or above he will receive the full amount of his 
insurance ($12,000), the co-insurance clause taking 
effect only when the loss is below eighty per cent of the 
total value of the risk. 

Thus an under-insured owner loses money on every 
fire. If his loss is partial, and under eighty per cent, he 
becomes a co-insurer to the extent of the deficit in his 
insurance and bears his proportion of any loss. If the 
owner’s loss is equivalent to eighty per cent or above, 
he receives the full value of his insurance, but obviously 
he loses the difference between his total loss and the 
amount of his under insurance. 

When it is explained to a merchant or a manufacturer 
(dwellings do not fall under this rule), that in order 
to receive full payment for partial losses he must carry 
insurance equal to eighty per cent of the total value of 
his property, he will seldom delay in getting in under 
the contract, for he realizes that most fire losses are 
partial. 

Using Graphic Methods in Explaining Blanket Insurance 
—Showing the Folly of Specific Policies 

Advantages from additional protection involved in 
the second argument, that of blanket insurance, can best 
be presented to a manufacturer by means of illustra¬ 
tions, convincing him by the use of his own figures. For 
instance, throe rectangles, A, B and C, may represent 


88 


HOLDING BUSINESS IN LINE 


the three isolated buildings of a fully insured manu¬ 
facturing plant. Upon the contents of A, the building 
where raw material is stored, has been placed insurance 
to the extent of 33 1-3 per cent of the total value of the 
contents in the three buildings. Likewise, the contents 
in B and C are respectively insured for 50 per cent and 
16 2-3 per cent. 

But under this specific insurance the owner is liable 
to lose money on a loss although the total contents of his 
buildings are fully insured. Thus if A is the store¬ 
house for raw products; B, the manufacturing plant; 
and C, the warehouse for finished products, it is plain 



B 


c 

: 


' 

50% 


163% • 

* ,• » , « , ’v • * ‘ 

• - . ^" 




that the contents of the three buildings are constantly 
shifting. At certain seasons of the year each building 
has contents far in excess of the percentage allowed, 
and should a fire occur in one of these at such a season, 
the owner would be a big loser. 

The agent can, with similar illustrations, convince the 
prospect that he is badly insured, and as a result the 
former is sure to increase his business by writing a 
blanket policy. 

Such a policy, the agent can show the prospect, will 
insure the contents of the three buildings as if they were 
in one structure. Should a fire occur in one, or all three, 
the insured will be fully indemnified for his losses. 

The ten per cent discount is allowed by companies in 
most states when a manufacturer insures for the full 
value of his plant. Certain classes of industries should 
be insured for the total value for they are more liable 















SELLING ADDITIONAL INSURANCE 


89 


to complete destruction than others. Policies for these 
prospects can be rewritten immediately it is apparent 
that full protection may be had in return for payments 
based on only a ninety per cent valuation. 

Increasing Your Business by Pointing out the Flaws in 

Poorly Drawn Policies 

The fourth argument—flaws in the contract—is one 
which embraces not only the other three, co-insurance, 
blanket insurance and the ten per cent discount; but 
which includes all the flaws that so often appear in the 
hastily drawn fire insurance policy. 

Expert fire insurance men are taking advantage of 
this condition, and are writing new business by simply 
pointing out the flaws in the prospect’s insurance con¬ 
tract. For instance, a Chicago agent who has made a 
specialty of writing printers’ risks often finds in the 
contract flaws which at once secure additional business. 
One of his prospects had a plant worth $10,000. He 
desired to carry insurance up to eighty per cent of this 
valuation, or $8,000. His machinery was valued at 
$8,000 and his stock at $2,000. These he wanted to pro¬ 
tect by placing $6,400 on the machinery and $1,600 on 
the stock, thus living up to the eighty per cent clause. 

Later the printer found that one of the $2,000 ma¬ 
chines was useless for his work. He sold it and replaced 
it with a $1,000 machine. Taking an inventory, the 
wise agent found that the contract which had covered 
the $2,000 machine was now improperly drawn for cov¬ 
ering the $1,000 machine, provided the printer wanted 
to be insured for only eighty per cent. The value of his 
machinery was now $7,000 and of the stock, $2,000. 
Thus the contract required alteration to cover $5,600 
(80 per cent) of the machinery value, while the $1,600 


90 


HOLDING BUSINESS IN LINE 


on the stock remained the same. The printer was carry¬ 
ing $800 more insurance than he needed. He was grate¬ 
ful for being shown, and the wise agent is now carrying 
his risks. 

But more often, in a business like the printing trade, 
the insured should have blanket insurance on machinery 
and stock. His stock is constantly shifting and he is 
buying new and discarding old machines. For this 
reason he will find, in case of fire, that he has been carry¬ 
ing excessive insurance on stock, for instance, and too 
little on machinery. Thus he will lose money when 
his total insurance may equal his loss. The agent should 
keep close watch of these risks, altering the policies when 
the risk changes and writing blanket policies whenever 
possible. 

Making Standard Policies Adequate — Supplying the 

Lacking Features 

Some agents have their own special printed forms, 
which they attach to the policy. The printing trade, 
continuing the same example, has certain peculiarities 
which the standard policies do not cover in their general 
terms, and which many agents fail to add in their 
specific clauses. Live agents have forms printed which 
do cover these items and which are attached to the 
policy. 

In the printing trade such contents as standing forms, 
electrotypes, engravings, drawings and designs repre¬ 
sent a great amount of labor and capital. Unless spe¬ 
cifically provided for, these values could not be secured 
in case of loss. The special forms which agents have 
printed provide for this by insuring the standing forms 
of type at a valuation based on the value of the metal, 
plus the cost of the composition. 


SELLING ADDITIONAL INSURANCE 


91 


This is merely a simple instance of what may be done 
by the agent who knows his business throughout the 
twenty-six letters of the insurance alphabet. Expert 
work in the insurance held is becoming a necessity for 
the insurer; and in the near future the public may ex¬ 
pect to see these professional experts in a field by them¬ 
selves. 

An insurance agent must know that manufacturers 
and merchants, until they have had catastrophes, pay 
only perfunctory attention to the insurance of their 
property. Too often their insurance is placed in the 
office of a relative or friend to “help him out.” Con¬ 
tracts are accepted from him, without reading the condi¬ 
tions; without scrutinizing the wording of the form, 
and without, as a rule, really realizing the insurance re¬ 
quirements of the case. It is just here that the expert 
agent has his opportunity. Examination will show him 
hundreds of policies which are full of defects. Convinc¬ 
ing the owner of these, the agent has the business. 

Extent of Specialization in Fire Insurance — The 
Evolution of a Profession 

Expert work embraces the whole insurance proposi¬ 
tion, following the policy from its beginning to its end. 
When a loss occurs, the expert takes care of the situa¬ 
tion, advises procedure, attends to the proper adjustment 
and collection of the loss; and acts as a counselor re¬ 
garding all changes which may occur in the nature of 
the risk and the bearing such changes may have upon 
insurance. 

In communities where there are manufacturers en¬ 
gaged in hazardous processes, involving the use of vola¬ 
tile substances, the owners of the plants often have diffi¬ 
culty in placing their insurance satisfactorily, and ten 
chances to one an expert agent from an adjoining city 


92 


HOLDING BUSINESS IN LINE 


will have to be called in to write the risks. 

Of still greater importance in building up a business, 
is the opportunity which the well informed agent has 
of helping the prospect before the risk is placed. By 
this is meant the important branches of inventories and 
appraisals, the layouts for proposed new plants, the re¬ 
construction and rearrangement of plants originally in¬ 
tended for one class of occupancy, but which are about 
to be adapted to another, and other engineering and elec¬ 
trical features. 

The time is coming when the fire insurance business 
will no longer be based primarily on friendship. The 
big risks are being placed with men who know. And 
the time is near when the agent will have to confine his 
arguments for additional insurance to the four features 
cited in the first paragraph of this chapter: (1) co- 
insurance, (2) blanket insurance, (3) the ten per cent 
discount and (4) flaws in the insured’s policies. 


Do It Better 


ETTING well enough alone never 
won a premium nor doubled an 
agent’s clientele. What was well 
enough yesterday is poor enough to¬ 
day. Today’s success will never satisfy 
the big, growing ideas of tomorrow. 

Win the risks your clumsiness lost. 
Discover the prospects your blindness 
missed. Solve the rate problems that 
balked your ignorance. 

Keep up with your task! Do it 
better! Grow! 




CHAPTER XIII 

Holding Business at Long Range 

BY JOHN B. MATH 

Of Math dt Woodrich 

Chafing within the limits of what he thought was a 
narrow field, an ambitious Michigan agent was search¬ 
ing his brains for a method whereby he could extend 
his clientele. He longed to climb the provincial bars 
surrounding his own territory and get the business which 
appeared at long range. He had a hazy idea of the pos¬ 
sibilities of mail-order insurance, but discarded it as 
impracticable. Still he felt that there was some way 
to increase his business. At home he was recognized as 
the most successful solicitor in the district. He had so 
identified his name with insurance that new business 
came easy and old business stuck. But in spite of this 
he wanted to spread out—to get beyond the frontiers 
of his limited territory. 

Suddenly opportunity came, disguised as a calamity. 
The papers reported that one of the big local industries 
was planning to move its plant to a Pennsylvania town, 
near its base of supplies. This announcement meant 
that some seven hundred families would follow the or¬ 
ganization into Pennsylvania. At first thought, the 
agent foresaw the cancellation of several hundred risks, 


95 







94 


HOLDING BUSINESS IN LINE 


for he had placed many policies among the employees 
of the factory. His competitors accepted the loss of 
business as a fact; but this agent who had been dreaming 
of an enlarged field, was determined that at least his 
business should not shrink. 

Planning to Hold Business—Retaining Old Bisks and 

Securing New 

Getting in touch with all of his general agents, the 
local solicitor learned that if he could hold the business 
of his old clients in the new town, general agents would 
write his risks, giving him the usual commissions. 

Outlining the campaign to his solicitors, he first be¬ 
gan a canvass among his own clients. Without excep¬ 
tion they agreed to let the agent take care of their in¬ 
surance as he had in the past. They were going to a 
strange town, among strange people; and knowing this 
agent, they knew that they could trust him with their 
business. They already had a hundred things to think 
of, and by assuming the care of their insurance, the 
agent earned their gratitude. Besides arranging for 
their insurance to be placed in the new town, the agent 
in many instances succeeded in writing policies for house¬ 
hold goods while in transit. 

But, while the agent had practically saved his old 
business, he had not added to it as he had hoped. 
Through his clients, the agent learned that his com¬ 
petitors had been slow in seeing their customers, and, in 
most instances, had not seen them at all. The other 
agents had accepted the removal of nearly three thou¬ 
sand people with finality. The live agent, however, was 
bound to make business in the face of a local depression. 

While his clients had disposed of their insurance mat¬ 
ters, their neighbors formerly insured in other agencies 


LONG RANGE BUSINESS 


95 


were uncared for. Thus they were in a receptive mood 
for the right kind of solicitation. 

Evolving a Plan and Then Carrying out 
the Campaign 

The agent and his solicitors arranged lists of names 
of the persons working at the plant, and began opera¬ 
tions, calling on the heads of households in the evening. 
In opening his argument, the solicitor showed the pros¬ 
pects that he had made arrangements with the general 
agents of his companies in the new locality, thus prov¬ 
ing that he could write insurance there. 

He pointed out to these prospects the fact that his 
old customers were already provided for. He showed 
how long they had been satisfied with his service, and 
followed with all his ordinary arguments. 

In some instances, of course, the other agents had so 
strong a hold on their clients that it was impossible to 
swung the business. But, for the most part, the agent 
found that the prospect, on the eve of his departure, 
was willing to make a change. In the excitement of 
moving, he was glad to be assured of protection. 

The final result of this campaign was that the agent, 
by writing all of his old clients, lost none of his business, 
but added to it by taking advantage of the lethargy of 
his competitors. 

In addition he found, in this canvass, householders 
who carried no insurance on their household goods. 
These he had little difficulty in insuring. 

Retaining an Advantage Once Won—Adopting a 
Suggestion and Expanding It 

The agent who made capital out of a local misfortune, 
still controls the insurance of the factory workers in 


96 


HOLDING BUSINESS IN LINE 


Pennsylvania and realizes a large annuity for his en¬ 
terprise. In addition, he kept close tab on the effects 
of the move in his own town. Forced sales of property, 
vacant houses and new tenants all tended to create new 
business there, and of this he clinched a goodly share. 
Of course, such wholesale removals as this do not occur 
often, but in every town there is a fairly steady stream 
of prospects moving in and out. By keeping careful 
note of local conditions the live agent will be surprised 
with the amount of business he will be able to secure 
from families moving away. The family moving to 
Dakota lands, the restless printer, all the vast migratory 
host offer prospects for the long-distance underwriter. 

The man who enters this field, however, must do so 
systematically. He should have a double card index 
file, one for a list of prospective causes for removals 
from the city, and the other for the names of those 
persons actually contemplating a removal. Newspapers, 
coal dealers, grocers and moving companies are a few 
of the possible sources for this information. 

Following in the Path of Campaigns for Land 

Exploitation 

In the larger cities land and trust companies are con¬ 
stantly inducing residents to move to western lands 
which they are exploiting. Where these firms are re¬ 
liable, it is well to cultivate the friendship of the men 
connected with them. Usually their farms are sold 
on time, secured by mortgages. These must be secured 
by insurance on the destructible property, and for this 
reason the long distance writer has a lucrative field for 
writing combination fire and tornado policies. 

Recently a Chicago trust company came into con¬ 
trol of a hundred farms in the Red River region. The 


LONG RANGE BUSINESS 


97 


bankers were anxious to sell and through their adver¬ 
tising manager began the exploitation. A far-seeing 
solicitor, who stood well at the bank, hurried to the in¬ 
stitution and soon secured permission to write the in¬ 
surance on all property sold. The purchasers of the 
land, who were mostly buying on time, secured their 
mortgages by insuring with the bank’s friend. As a 
result this agent wrote over a hundred risks on property 
fifteen hundred miles away. Moreover, he still controls 
the most of that business, and by keeping in close per¬ 
sonal touch with those clients through his letters, he 
secures the new business which comes in steadily as the 
prosperous farmers erect new homes and barns. 

Besides writing this kind of insurance, the solicitor 
has an opportunity of writing the risks of his clients 
who have property in other cities. Similar to this is 
the writing of policies upon grain and other warehouse 
products. A high rate may be secured on this business 
and it affords the agent a substantial premium. When 
the insurance agent learns that a certain firm is to re¬ 
ceive a large consignment of a product, he solicits the 
insurance on this product for a specified time, during 
which it will remain in the firm’s possession. To meet 
these conditions the policy is often written up to be held 
for thirty days, and not to be in force until the consign¬ 
ment is received, and due notice given. The agent 
simply receives instructions to write up the insurance 
and hold it. At the proper time he receives a notice to 
close. 

Observing the Law and Making Arrangements for Long 

Range Underwriting 

Most states have a law compelling insurance to be 
written by resident agents of the state, but this does not 


98 


HOLDING BUSINESS IN LINE 


hinder an agent controlling a certain amount of under¬ 
writing in another city. An arrangement for writing 
this long-distance insurance is easily made with the 
nearest general agents of the several companies. The 
general agent receives the information of the removal 
and calls at once upon the client in his new home. There 
he verifies the inventory, prepared by the local agent 
at the other end, ascertains the rate in each instance and 
writes the policy. The agent at the other end receives 
the commission for the tip. He puts down the date of 
expiration in his expiration file, and, although many 
miles distant, still acts as his client’s agent, thus making 
sure of the continuance of his commission. 

The agent keeps himself before his distant client by 
means of calendars, circulars and personal letters which 
he sends out monthly to the names on his mailing list. 
When the risk is about to expire in the distant city, he 
notifies his client and the general agent simultaneously, 
and the risk is rewritten by the general agent’s force as 
it was in the first instance. 


Reach Out 

S UCCESS to the man on the ground; 

failure to the absent. That is the 
first law of inertia. 

Bestir yourself. Put your wits in 
motion! Use the hundred means other 
solicitors have for spanning distance. 
Less and less is space insurmountable. 
Reach out! 




CHAPTER XIV 
Systematizing the Office 

Card systems for company accounts and the location 
of risks by districts are rapidly being adopted by fire 
insurance agencies throughout the country. The larger 
offices found the steps imperative and the smaller 
agencies found them practicable. In agencies repre¬ 
senting ten or a dozen companies the old ledger accounts 
have become burdensome; and wherever the card sys¬ 
tem has been substituted, it has been found more 
efficient and easier to handle. 

Agents, moreover, have found it both profitable and 
convenient to locate their risks systematically by districts. 
In this way they can see at a glance just what risks they 
are carrying in certain sections, what companies are 
located there and whether or not they will dare accept 
the hazard. Such an index keeps the agent’s risks evenly 
distributed throughout his territory; and in case of fire, 
it equalizes the loss among all the companies. 

J Keeping Company Accounts by Card Index—The 

Card Described 

But of first importance to most agencies is a method of 
keeping company accounts. In a previous chapter, a 

card index system was described, showing how to elimin- 

>’ , % 

» * 

> > > 

5 > 5 


99 







100 


HOLDING BUSINESS IN LINE 



Form I: Top section of company account card upon which the agent keeps a record 

of his dealings with each company 


ate the registers. No provision was made, however, 
for keeping the company accounts. The card (Form I) 
to be used in this system should be about ten inches high 
and twelve inches wide. 

This card is tiled in a regulation drawer for the ver¬ 
tical filing of correspondence. One card will be used 
for each company each month. In case of companies 
for whom the amount of business written is small, one 
card will extend over several months. The ruling may 
be continued on the reverse side. The name of the com¬ 
pany will be written at the top of the card and the 
months covered by that record noted in the upper left- 
hand corner. Cards for any company will be numbered 
consecutively, making the account continuous and pre¬ 
venting the misplacement of any card. 

For each company a guide bearing the company name 
will be made out, and all cards filed in front of it. The 
current account will always be in front, thus making 
reference to it immediate. It will be observed that the 
card furnishes a complete record of the policy, to¬ 
gether with the company’s account itself. Two lines 
are sufficient for the entire record of any policy. The 
policy number, term, day and expiration are recorded 
at the left. Under the column headed ‘‘Assured and 
Property” will be noted the name and address of the 


























































































SYSTEMATIZING THE OFFICE 


101 


assured on one line, and nature of the property directly 
beneath. Following is shown the amount and rate. 

As commissions at different per cents are allowed on 
different classes of policies, columns are provided for 
premiums and returned premiums under each of these 
classes. By extending the amount of the premium to 
its proper column, all premiums at the same commission 
rate will be together. The debit and credit columns 
under “Miscellaneous” provide for all items other than 
premiums, and thus make the account complete in every 
detail. 

A final column has been included for home city pre¬ 
miums. In many places a tax is levied on insurance 
business for the maintenance of the fire department. By 
extending to this column all premiums for policies 
written in the home city the record is easily drawn off. 
This saves the labor of going through a mass of accounts 
and separating local policies. 

% 

How the System Admits of Monthly Reports — The 
Segregation of Accounts 

At the end of the month the account current is readily 
made up. Each column is totaled and the commission 
on each class of premiums is obtained from the total 
amount of that class. This system also assembles the 
entire account with any company. When a special agent 
calls, the cards for his company are taken out and 
handed to him for examination. He has no means of 
comparing them with the business written for other com¬ 
panies. At the same time the total business for any 
month is readily assembled from the individual cards. 

Agents who have tried to keep an account of their 
risks by districts know that this is practically impossi¬ 
ble with the book system. Space may be set aside for a 


102 


HOLDING BUSINESS IN LINE 


record in each district, but it is impossible to tell in ad¬ 
vance how much space will be needed. The result is 
that the records must be scattered through two or three 
books. Yet it is necessary to keep a record of the risks 
in force in each locality in order to guard against plac¬ 
ing too much insurance in close proximity to undesirable 
risks. 

The card system has simplified the keeping of these 
records. For each risk written, a card is made out and 
filed, according to the location of the risk. One or 
more drawers of an improvised cabinet are used for each 
district. These may be by wards, voting precincts, town¬ 
ships or in any way to suit the conditions of the local 
agent. The list in each district is subdivided by street 
guides, arranged alphabetically. 

Guide cards with wide center projections are used for 
the main divisions and the districts are indicated on 
guides with half cut right and left projections. These 
districts are subdivided by third cut guides, on which are 
written or printed the names of the streets. The policy 
cards are then filed according to street numbers. With 
these various subdivisions, the business in any district 
of a large city may be watched as closely as that in a 
small town. 

Filing Rates of Target Risks—Having Information 

Instantly at Hand 

To write a policy while the iron is hot, is the desire 
of every agent. But this is often impossible because 
the agent lacks specific information concerning the risk 
in question. Very often the agent is unable to give 
the prospect even an approximation of the rate. Of all 
activities, the business of fire insurance is the one which 
should be so conducted that when the insurance sales- 


SYSTEMATIZING THE OFFICE 


103 


man brings a customer into the office, the rates may be 
found and the policy written with the least possible 
delay. This requires the classification of rates in such 
a way that the premium on a particular piece of prop¬ 
erty can be determined quickly. 

The rates on property which the agent hopes to insure 
are secured from the underwriter’s associations which, 
in the various states, fix the rates in small towns. Each 
association publishes a pamphlet in which are rated all 
the buildings of every class, together with a map showing 
exposures. In this case the rate is easily found by refer¬ 
ring to this book, or if the hazard is a special one a 
special rate must be secured upon it from the insurance 
company. 

In every town there are certain special hazards which 
the agent hopes to write. As the first step he writes to 
the company for the special rates on these hazards, 
studies them carefully and, if it is impossible to show 


1 aY 


POLICIES 

. . -.-.. . . 

; \ / • A-;,. -'’ • 

EX(?i RATIONS 

■ * * f'], • ’ 1 '', A C . 

."V ; . ... .. : <v. 'v ' 

; . • • ■ . .7^- " 

'• 

- *•> . ■ ; • 

: •■’. - •"! V'Tk '- - 

< - » 

1 

...... • ;->..••• . . •. - . .-.:■■■■ 

■ - 

• 

' 

. 

- 





AMOUNT $_ 
DATE-.- 


— 


.190 


RATE 


Form II: Alphabetical index card on which is filed the insurance rate upon every 

risk likely to be solicited by the agent 
















































104 


HOLDING BUSINESS IN LINE 


the owner a means of lowering his present rate, files the 
rate away with rates of the other risks which he aspires 
to write. It is hardly necessary to add that the filing is 
done with small cards arranged alphabetically in a con¬ 
venient tray. In this way the agent can systematically 
collect rates on every risk in his territory. 

In a large city where property often varies in struc¬ 
tural respects from the class of buildings to which it 
belongs, a more detailed method is required for finding 
the rate. Finding the rate, however, rests with the board 
of underwriters; filing it rests with the agent. 

To keep the rates on property for ready reference, the 
city agent like the country agent, maintains a rate card 
catalog. Under this, properties are listed alphabetically, 
with a minute description. The card (Form II) 
provides for the name and address of the insured, the 
location of the property, amount of policy, term, rate 
and date of expiration. It also provides for the number 
of feet of the north, east, west and south exposures. 


Settle It 


A THING done wrong is just be- 
gun. Tomorrow, or next year, it 
will bob up serenely to be done again. 
You cannot bury it. All you can do is 
gloss it over, hush it up, hide it. 

Save yourself embarrassment, loss of 
time, loss of temper. Settle it. Do it 
right. Systematize. 



Part V 


WINNING BUSINESS THROUGH 
SERVICE TO CLIENTS 



Service—the distinguishing element of the successful agency—is here grouped in 
its three main divisions and charted in detail 
























































































































The Right Come-back 

OUCCESS isn’t made up of orders; it is 
^ made up of re-orders. And a good 
customer wrongly treated lasts no longer 
than the shoddy he buys. 

No matter whether the commodity be 
merchandise or insurance, there is a 
“come-back” on every sale. 

Whether it is a “come-back” in re-orders 
or a come-back for complaint, depends 
entirely upon the product you furnish, 
the service you give. 

Every cent gained by misrepresentation 
is lost in patronage that never returns. 
However wide your field of new pros¬ 
pects, dissatisfaction can blight it. 

Aim first to sell satisfaction; and your 
line will re-sell itself. 





CHAPTER XV 

Getting Trade by Building Confidence 

BY JAMES D. FLOOD 

Of Moore, Case, Lyman c& Hubbard 

Service gauges the success of the fire insurance agent. 
It is the distinguishing element. Because of service or 
the lack of it, one agency prospers, another fails. This 
is true with all occupations bordering on the professional, 
but it is especially true in the fire insurance profession 
—a business which, for the most part, can neither tempt 
the prospect with price nor particular quality of goods. 
The rates are uniform with all companies and to the 
prospect all companies look alike. For this reason the 
fire insurance agent has had to make the most of the 
feature, service—an intangible factor not bound down 
by legislation or board rules. 

While the agent may be expected to perform nearly 
every conceivable kind of gratuitous act, service in the 
fire insurance sense falls into six natural divisions: in¬ 
direct lowering of rates, assisting in appraisals, deter¬ 
mining kind and amount of insurance to be carried, 
watching renewals, giving regular inspections, making 
personal adjustments. 

Of the variety of ways in which an agent may prove 
himself to be indispensable to his clientele, one stands 


107 









108 WINNING BUSINESS THROUGH SERVICE 


out pre-eminent—the indirect lowering of rates, pre¬ 
ceded by alterations in the risk. It is the agent’s nearest 
approach to the selling tactics of the merchant. Wher¬ 
ever possible, the aggressive agent never fails to sug¬ 
gest physical improvements which will reduce the rate. 
Backed up with facts and figures, he is in this way not 
only able to retain his own business, but to secure risks 
heretofore unresponsive to his best solicitation. The 
shortest route to a business man’s heart is through his 
purse. Show him how he can put dollars into his sur¬ 
plus and the battle is won. Often, pointing the way to a 
direct saving in premiums will cause a big risk to change 
agencies in ten minutes. 

For several years a young Chicago solicitor had been 
fruitlessly attacking a $100,000 risk. Suddenly the 
truth dawned on him that while he had been reciting his 
abilities, he had failed to prove them. Unless he actually 
showed the firm what he could do, he could never hope 
to land the business. 

Resolving to find a point of contact, he started some 
quiet investigations, with surprising results. He found 
that his competitor had been lax with the biggest risk 
on his books. There were possibilities of lowering the 
rate in half a dozen places. At the end of three weeks 
he again called on the manager of the factory, this time 
primed with facts and figures. 

“Give me $500 and I’ll give you $1,000,” he ex¬ 
claimed as he pushed his way past the office pickets and 
into the ground-glass sanctum of the general manager. 

“What’s that?” exclaimed the amazed executive. 

‘ ‘ The point is this, ’ ’ began the agent, ‘ ‘ you are paying 
too much for your fire insurance. Give me $500 and 
I’ll tack up two dozen ‘No Smoking’ signs, move your 
gasoline tank outdoors, place hydrants in. the eight halls, 


BUILDING CONFIDENCE 


109 


hang chemical fire extinguishers in every room, put five 
iron doors in the stock room and cut off your drying 
room. These will lower your rate about one dollar a 
hundred and save approximately $1,000 a year in prem¬ 
iums. Here are the figures.’’ 

The manager was speechless. Here was a phase of fire 
insurance business with which he was unfamiliar. But 
he saw the point. “Young man,” he said, “here is my 
order for the five hundred. Put those alterations through 
and then come back for our expiration dates.” 

And the wise young agent got the business. The 
former agent lost his best customer because he had failed 
to give his client the benefit of his expert knowledge. In 
the young agent, the factory manager saw a live servant 
—a man who would be of real dollars and cents service. 

Possibilities for Indirect Bate Reductions 
—Giving Clients a Square Deal 

The possibilities of indirect rate reductions cannot be 
too strongly emphasized. Opportunities begin at the 
time the prospect is planning a structure, and continue 
as long as the agent is in the business. Risks are often 
solicited while buildings are still on paper, and before, 
if possible. They are immediately cinched if the agent 
is able to sit down and suggest practical alterations 
which will not only minimize the possibilities of fire, but 
will reduce the insurance rates as well—an expense 
which is as regular and insistent as taxes. In the larger 
cities some of the insurance agencies even go so far as 
to employ graduate engineers who will estimate the 
exact cost of the improvements, and may even supervise 
their construction. 

Selection of the kind and amount of insurance is a 
service which the prospect naturally associates with the 


110 WINNING BUSINESS THROUGH SERVICE 


writing of a policy, and yet, because many agents fail 
in the first step, the country is flooded with policies so 
poorly drawn, that upon a very large per cent of them 
payments might be legally refused were it not for the 
liberality of the companies. Specific insurance is fre¬ 
quently written where blanket policies would give real 
protection, and itemizing is often but half done. 

I have a college acquaintance who is now running a 
second-hand book store near the campus where we used 
to attend the university. Recently I looked over his in¬ 
surance policies which had been drawn up by a local 
agent and found that neither second-hand books nor 
those sold on a commission were itemized. Had there 
been a fire, he could have collected on only the few new 
books which were on his shelves. 

When I was again at my office I wrote him a letter 
enclosing “riders ,” properly itemizing his stock, which 
I said I would paste on his policies and report to the 
companies if he would mail me the contracts. Within 
three days they were on my desk, and I performed the 
promised service. When those policies expired, I got 
that business and several other risks which the book¬ 
seller swung my way. 

Watching Reports of Companies — Protecting 
Your Clients From Loss 

While lowering rates, assisting in appraisals and giv¬ 
ing advice as to kind and amount of insurance are 
services which the agent performs in the hope of influ¬ 
encing the prospect, the services which he gives his 
clients are of even greater importance, for through them 
he holds permanent patronage—the salvation of the fire 
insurance agency. 

Renewals are not only watched by live agents, but the 


BUILDING CONFIDENCE 


111 


companies are watched as well. Every agent has risks 
which for a variety of reasons are difficult to place. 
Often he must write them in companies which have not 
as good standing as some which refused the risk. For 
this reason the agent scrutinizes their reports carefully. 
Weekly reports on all companies, to be had from certain 
insurance publishing houses, enable the agent, if he will, 
to keep close tab on every company he represents. If 
these reports indicate that the stability of a certain com¬ 
pany is questioned, the agent should transfer the policies 
he has in that company, secure a return premium and 
thus guard the interests of his clients. 

One of the western agencies advertises this feature 
and has many proofs to offer of its efficiency. A few 
months ago, through their advance reports, they deter¬ 
mined that a certain company was unsafe. They can¬ 
celed all the policies in this company, secured the full 
return premiums and transferred the policies, just be¬ 
fore the company failed for thirty cents on the dollar. 
Within ten days one of the agency’s clients, for whom 
policies had been transferred, burned out. He received 
payment for his loss in full. Had he remained in the 
other company, the chances are he would have received 
much less than thirty per cent of his insurance. He 
and the clients who had received their full return prem¬ 
iums were forcibly impressed with the efficiency of the 
agency which had protected them, and immediately be¬ 
gan to swing business that way. 

Inspections, regularly made, are one of the best serv¬ 
ice features to be found in the up-to-date office. Agen¬ 
cies that are large enough employ a corps of men who do 
nothing else but inspect risks. Visiting the larger haz¬ 
ards at least once a month, they make thorough in¬ 
spections, suggesting improvements and reporting the 


112 WINNING BUSINESS THROUGH SBRYICE 


careless acts of workmen which might result in a fire. 
The client is constantly reminded of the valuable service 
which he is receiving. 

How Inspection of Property May Save Money for the 
Client—Conditions That Raise Rates 

The efficiency of such service was recently pointed out 
in a Michigan manufacturing plant. Inspectors for a 
local agency found that the concrete bed underneath the 
boilers rested in turn upon wooden timbers, which from 
direct contact with the stone were too hot to touch. With¬ 
in another week the slow drying timbers would have 
been ignited, and a disastrous fire might have been the 
result. Steel girders were immediately installed and the 
client was so impressed with this one specific example of 
agency service that he is still reciting it to his business 
friends. 

Inspection service, while not always as dramatic as in 
this instance, is always effective. Many clients have 
been so tutored that now they seldom do anything of 
importance affecting their buildings without first tele¬ 
phoning thier insurance agent for advice. A Chicago 
flat owner was surprised recently when his insurance 
agent told him that if he rented one of his apartments 
to a dressmaker, the rate would be advanced ten cents 
on the entire building. This timely bit of advice saved 
the client $40 insurance on his $40,000 building for one 
year. Had he admitted this prospective tenant without 
first asking his agent, the profit on one apartment would 
have been more than lost. 

Making adjustments is another important service. The 
chief element of success in this branch of the business 
is to get the money into the assured’s hands as quickly 
as possible. 


BUILDING CONFIDENCE 


113 


Last year a Chicago grocer sustained a loss of some 
$1,200 while he was attending a convention in Cincin¬ 
nati. There was no question about the legality of the 
fire and, as the risk was covered in several agencies, the 
settlements were made by the local agents. All the 
agents, save one, rushed their checks to the grocer’s wife. 
The other agent sent his check in a special delivery and 
registered letter to the client ’s hotel in Cincinnati. That 
grocer is still talking about the check, and although the 
other agents paid their claim promptly the grocer is now 
turning all his business over to the agent who was en¬ 
terprising enough to get his letter to the actual loser in 
Cincinnati. 

Such services as have been outlined here are rapidly 
becoming the attributes of a good agency. The insur¬ 
ance agent is building a profession. He must perform 
much the same service in his line as does the attorney 
in regard to the client’s legal rights. It is the agent 
who makes the most of such opportunities that lays the 
surest foundation for a permanent business. 


Profit Sharing 

THOROUGHLY selfish business 



cannot permanently prosper. To 
establish trade, to win prospects, is to 
yield some profits, inclinations, thought 
and labor, unrequited, to satisfy and 
hold your clients. Profit in the insur¬ 
ance field comes finally from service. 




CHAPTER XVI 

Adjustments That Create Business 

BY B. C. BEAN 

To be known as, “The best agency in town to make 
settlements/’ is to enjoy the help of the passive factor 
in insurance business-getting—a reputation for prompt¬ 
ness and sure pay. An agency with such a reputation 
always has a conspicuous lead over competitors in writ¬ 
ing volume and quality of risks. 

Although this reputation is of such vast importance 
it is surprising how easily it is often obtained—and lost. 
One prompt and liberal settlement often puts an agency 
on the road to prosperity; an ill-adjusted loss often un¬ 
does the careful work of years. 

It is the aim of every agent, therefore, to create busi¬ 
ness along the lines of adjustment. To do this the agent 
must work, as far as possible, along the lines of what 
the assured desires. When loss occurs the assured wants 
to know, in general, where he stands. Particularly he 
wants answers to two big questions: (1) liability of the 
company; (2) probable time, manner and amount of 
settlement. These questions are perfectly logical, for it 
is always to be remembered that, to the average in¬ 
sured, the policy, with its many provisions, is practically 
meaningless when it comes to interpretation. 


114 








BUSINESS-GETTING ADJUSTMENTS 115 


When loss occurs, the owner immediately thinks of 
instances where payment has been evaded, as he has 
heard, through some “fine type” profession, or some 
other clause in a policy. Then the manner of loss may 
be, and often is, such as to leave the question in the 
mind of the insured as to just what the policy covers. 
Fire following explosion, or loss of goods from adjacent 
conflagration, doubt as to the definition of the term 
“stock, or contents,” are common examples. 

The first principle in business-getting adjustment is, 
then, to convince the assured as to the liability or non¬ 
liability of the company. No time should be allowed to 
elapse between the loss and the authoritative statement 
of this. As soon as the assured has been informed of the 
liability of the insurance company, the agent should 
next inform him as nearty as possible as to the probable 
time, manner and amount of the settlement. This is 
of special importance, for if the assured is in doubt he 
advertises his doubts. Once he has positive information 
he is in a position to help the company and agency by 
positive, favorable advertising. The assured who has 
positive confidence—before his loss is adjusted—that he 
will be satisfactorily recompensed, has not only helped 
to bring about that general satisfactory condition, but 
his satisfaction often acts as a lever to write dilatory 
business while the memory of the loss is still vivid in the 
minds of the public. 

Providing Against Possible Dissatisfaction Over 

Adjustments 

But unless the agent has provided for a preliminary 
means of rightly handling property losses, he will be 
unable to answer the questions which naturally arise in 
the assured’s mind. These questions are answered easily, 


116 WINNING BUSINESS THROUGH SERVICE 


however, if the agent has prepared an “In Case of Loss 
Table,” as described below. 

In case of loss, no two insurance companies may dele- 
gate the same authority to the agent. Whatever uni¬ 
formity exists in rates, stamping requirements and re¬ 
ports, this uniformity does not hold in adjustments. 
Company methods vary from liberality of authority 
and payment, to closeness both in the delegation of ad¬ 
justments, particularly through the agents and in the 
actual payment of the loss. As a consequence of this 
condition the agent who has a loss in his agency does 
not know what steps the company will take, unless he 
has secured just this information in advance. 

In order to be able to promise the assured something 
definite, therefore, the agent should make use of the “In 
Case of Loss Table.” To prepare this table, get a state¬ 
ment from each company in your agency, stating: (1) 
to whom and how loss notifications should be made; 
(2) sizes and kinds of losses to be handled by (a) agent; 
(b) special agent; (c) general agent. 

This table should be comprehensive enough to cover 
any loss or losses which may occur. It may be drawn 
from either of two sources, the supervising agency or 
the special agent. The former source will have an 
advantage, as statements from the supervising agent will 
be in writing and a matter of record. Special agent’s 
instructions will be more comprehensive, but in case of 
dispute are not commonly of record. Usually it will be 
best to have the special agent write the letter of in¬ 
structions when he has authority, giving as full informa¬ 
tion as is required. This table, prepared and kept up- 
to-date, furnishes the basis of business-creating adjust¬ 
ments. Foi, no matter what the loss is, the agent can 
tell the assured what he most wants to know: liability 


BUSINESS-GETTING ADJUSTMENTS 117 


of the company, probable time and manner of settlement. 

Now that the agent has so valuable a record as the 
‘‘In Case of Loss Table” he must be the first on the 
ground in case of loss, he must get to the insured, for 
it is a well-known insurance axiom that “The presence 
of the agent insures confidence in the company.” In¬ 
deed, this is such a valuable asset that at least one banner 
agency makes good use of the catch-line: “First on the 
ground in case of loss.” It is always to be remembered 
that both mental and physical reasons prompt the agent 
to take up this stand: mentally, the assured is in a more 
or less acute state of shock; physically, property may 
need conservation to avoid preventable waste. 

The second step before adjustment is one fertile with 
possibilities—the assured may need ready money. The 
agent should not let a competing agency at a bank hav¬ 
ing an insurance department, be hrst on the ground 
with offers of temporary funds. A live agent will see 
that the agency makes all advances against future pay¬ 
ment of losses. 

When the Company Adjusting Attends to the Loss — 
Assure Your Client That He Will be Protected 

All adjustments are either made by the company’s 
adjuster or settled through the agent. If the settlement 
is to be made by the adjuster the agent can save the 
assured much time by securing a preliminary statement, 
unless there is a large number of companies on the risk. 
If the agent uses the duplicate daily report method, as 
described in a succeeding chapter, he has at hand all 
the information (aside from possibly the special agent’s 
inspection report) that the company has. It is also 
possible for the agent to get the assured over some of 
the slow points in adjustment; for instance, to forestall 


118 WINNING BUSINESS THROUGH SERVICE 


any idea of over-payment; to define the cost price, loss 
depreciation, basis of values, and to take up similar 
points. To get the assured in the right ‘ * settlement ’ ’ 
frame of mind, is no small task for the agent. 

Companies universally recognize that agency adjust¬ 
ment tends to liberality. As a result, depending upon 
the policy of the company, the local agent is seldom 
given authority on any except small losses, as those up 
to $250, or more rarely $500. From his “In Case of 
Loss Table,” the agent can readily determine whether 
or not he will be expected to settle the loss. If he set¬ 
tles it, he pays on the shortest time possible. For rightly 
or wrongly, the public has the universal idea that 
promptness means worth. A company pays promptly; 
it must be reliable, so the average insured reason; and 
business is built up by working along the same line of 
thought as that of the prospect to be influenced. 

With his own adjustment, therefore, the agent finds 
his opportunity. As the standard New York policy 
reads: ‘ ‘ The sum for which this company is liable shall 
be payable sixty days after date of satisfactory proof of 
loss has been received.” This means that two months 
may elapse before the assured may actually have his 
money, where an adjuster handles the loss. By hand¬ 
ling it yourself, you mhke it a point to get the money 
representing that loss in the hands of the assured, 
within twenty-four hours. A small loss quickly paid 
creates more business than any other principle in ad¬ 
justing. 

Avoiding Arbitrated Settlements—How to Handle 

Excessive Claims 

In making these settlements arbitration should be 
avoided wherever possible, as it is bound to be unsatis- 


BUSINESS-GETTING ADJUSTMENTS 119 


factory. Whatever the assured gets through a board of 
arbitration, he is sure to think that it came to him be¬ 
cause he called for a board of arbitrators. Unless the 
assured is known as a most unreasonable man, arbitra¬ 
tion makes a poor talking point. One leading local 
agency makes the slogan, “A thousand losses paid with¬ 
out a single contest.” The public feels that arbitration 
means a contest—a dispute. As a result, arbitration is 
generally a poor advertisement. Dwelling risks are 
often the subject for dispute, for they are usually given 
a sentimental value by the assured. When an owner 
makes excessive claims of this nature it is wise policy 
to let the loss go to arbitration. The assured, knowing 
the claims are excessive, will not wish to do this, and will 
commonly accept a reasonable settlement. 

In satisfying the assured a method of figuring loss 
must be used that is readily comprehensible. For 
instance, in calculating the value of a frame dwelling, 
the experienced agent has but to determine the cubic 
feet and age in order to determine the value. Such short 
cuts will not do for the assured. The value must be 
reached by working along the same line as the assured 
took in accumulating his property. 

Stock losses call for careful computation, also along 
the assured’s line of accumulation. Of the standard 
methods, a formula which takes the net inventory, adds 
purchases and deducts sales, less estimated profits, 
agreed depreciation, and. salvage, has a merit of being 
simple and easily understood. 

How to Get the Assured to Boost After Adjustment — 

Securing Testimonials 

Once I have made satisfactory adjustment, what will 
be the advertising value to my agency? This should 


120 WINNING BUSINESS THROUGH SERVICE 


be the by-product thought of every adjustment. Right 
handling means that the assured will boost. Handling 
along the line laid down above will always secure satis¬ 
faction. Satisfaction secured, there remains nothing 
but recording—placing in the shape of evidence the fact 
that a thoroughly satisfactory adjustment has been made. 

Testimonials from the assured should cover other 
points than prompt payment. A small policy-holder— 
one having few influential friends—fears that the men¬ 
tion of the law may be invoked against him or that brow¬ 
beating tactics may be employed. This is not possible in 
the ordinary country town, yet the fear sometimes 
gains hold there. To create business, therefore, the agent 
will see that the assured not only covers the “painless¬ 
ness of adjustment” but that he circulates the news first 
hand. 

In using adjustments to create business it is always 
to be remembered that timeliness is the leading business¬ 
getting factor. Pay the loss—get the testimonials—do 
the advertising while the ashes—and public interest— 
are hot. 


Know Your Ground 


HHHE time to adjust is beforehand. 

A Let the fire find you with a solid 
policy—a case that only the insured’s 
dishonesty can shake. Only thus can 
you make sure of his satisfaction—of 
your growth. 




t 

CHAPTER XVII 

Helping Clients to Fix Insurance Values 

BY ARTHUR K. WOODBURY 

Manager Metropolitan Department, American Appraisal Company 

Let the fire insurance solicitor have one or two con¬ 
tested settlements and he will find himself on the to¬ 
boggan slide to failure. In spite of his own innocence 
and the justification of his company, the solicitor will 
have to bear the unearned suspicion of the community. 
The insured will always think he was beaten, and the 
public will look upon the company as insecure. 

Almost every law suit could be eliminated if the agent 
convinced his client of the desirability of appraising his 
property before a fire instead of after it. For there is 
not a business man, lawyer or judge in a court of law 
in the land who will dispute the fact that a proof of 
loss prepared before a fire is more valuable than a proof 
of loss after the fact. 

Showing Your Client How to Appraise His Property on 

a Depreciation Basis 

The average insured person keeps no record of values 
other than the book value, or inventories, which always 
or nearly always show a depreciation basis upon the 
original cost price and not upon the present day prices 


121 






122 WINNING BUSINESS THROUGH SERVICE 


to reproduce. If the risk is a small one, the agent can 
show his client how to appraise his building and stock 
to comply with the requirements of the standard form of 
a fire insurance policy. But, if the risk is a special 
hazard or a manufacturing plant, the agent will find 
that an appraisal by disinterested parties is necessary. 
Moreover, it should be a scientific appraisal—one that is 
obviously neutral and based on recognized authority. 

The system herein described was devised by one of the 
largest appraisal companies in the business and has been 
adopted by 2,200 leading concerns in this country and in 
Canada. Some private corporations—notably the Stand¬ 
ard Oil Company—have organized their appraisements 
along the same lines. It is applicable alike to the stock 
company and factory mutual insurance, and to all forms 
of the “Standard Policy” used in various states. And 
—the best testimony of all—it has stood the practical 
test of prompt and satisfactory settlement for $5,500,000 
in fire losses. 

Invariably the solicitor should show his client that an 
insurance policy is not a contract to pay money. It is 
simply a contract of indemnity—and conditional in¬ 
demnity at that. The indemnity may be satisfied either 
by replacement of the property destroyed or by payment 
of its “actual cash value” in money to the assured. The 
option as to which method of satisfaction shall prevail 
rests with the insurance companies, not with the assured. 

Using the New York Policy as a Standard for 

the Appraisal 

The New York standard fire insurance policy, which 
is largely followed in other states, provides that the in¬ 
surance companies “shall not be liable beyond the actual 
cash value of the property at the time when any loss or 


FIXING INSURANCE VALUES 


123 


damage occurs and that the loss or damage shall be as¬ 
certained or estimated according to such actual cash 
value (with proper deductions for depreciation, however 
caused), and shall in no event exceed what it would then 
cost the insured to repair or replace the same with ma¬ 
terial of like kind and quality. ’ ’ 

Elsewhere in the policy the words “cash value” and 
“sound value” are used synonymously as indicating the 
measure of the insurance companies’ liability in the de¬ 
struction of any article insured. Where there is no 
actual depreciation, the sum defined as “what it would 
cost the insured to repair or replace the same with ma¬ 
terials of like kind and quality” at the time of the fire 
becomes the “cash value” or “sound value” of the 
property. The assured cannot specifically demand re¬ 
placement, although he can get the cost of replacement 
in an action at law. If he would insure rightly, he must 
get the present cost of replacement, accurately figured, 
as the unit of value from which to estimate “deprecia¬ 
tion, however caused,” and thus arrive at “cash” or 
“sound” value. It is the business of the solicitor to see 
that the insured understands this thoroughly. 

The same rule applies to machinery, fixtures and fur¬ 
niture. If the owner proves his loss correctly, he must 
be paid the sound value of what was destroyed— 
not some substitute for it—provided the article destroyed 
is procurable. 

Depreciation in the insurance sense means actual, 
physical deterioration, militating against the worth to 
the owner (in relation to the uses and purposes for 
which it has been produced or is maintained) of the ar¬ 
ticle appraised. Thus, any circumstance which renders 
manufactured goods less valuable on the market than 
when they were made—as, for instance, antiquity of style 


124 WINNING BUSINESS THROUGH SERVICE 


—can properly be charged off in depreciation. But the 
estimated salable worth of a manufacturing plant bears 
no relation whatever to its “cash value” from an in¬ 
surance standpoint. The manufactured article is made 
to sell; the plant is made and maintained to operate. 
The value of one is tested from a commercial point of 
view; the value of the other from an industrial point of 
view. 

The majority of manufacturers, each adopting an ar¬ 
bitrary figure of his own, write off annual percentages, 
miscalled “depreciation,” against their factory inven¬ 
tories, to provide for the purchase of new machinery. 
It is a dangerous practice, liable to prove a boomerang 
in case of fire. The factory inventory should be kept 
strictly on the basis of sound value. Allowances for re¬ 
newals should be written off in a separate account, which 
may be called “investment account,” “plant sinking 
fund,” or any other name the manufacturer chooses 
to give it. 


Determining the Insurable Value of Raw Material 

and Stock 


How, then, shall sound value be determined ? It must 
always be remembered that the cost of replacement at 
the time of the fire is the unit of value, from which 
actual depreciation must be figured—not the original 
cost to the owner of the article damaged or destroyed. 
On this basis the following system has been established 
by an appraising company, after years of experience. 

First, as to raw material, the stock book of the as¬ 
sured, together with such other evidence as can be ob¬ 
tained, determines the amount on hand at the time of 
the fire. Sound values are determined by the market 
quotations at the time of the fire. 


FIXING INSURANCE VALUES 


125 


Second, as to manufactured product and “stock in 
process,” an examination of the client’s factory cost 
system is made, if desired, to ascertain its applicability 
to the insurance problem. If it needs amendment— 
which is usually along the line of simplification—the 
necessary changes are suggested. No general directions 
can be given for a factory cost system, as one plant dif¬ 
fers so radically from another. The governing principle, 
however, is that everything which enters into the ex¬ 
pense of producing any article—including not only 
“shop cost,” but also “overhead” or “fixed charges” 
—may be figured at its insurable value up to the point 
where profit begins. Profit may not be figured, even 
though the article has been sold in advance and the 
manufacturer has lost a profit already earned. 

Third, as to plant—buildings, fixtures, furniture, 
machinery and tools—an appraisal is made which 
amounts to a set of detailed working specifications, with 
plans, for the reproduction of the entire property. Sec¬ 
tional plans of each building are drawn and piece-bills 
or bills of quantities are figured out, story by story, so 
that the structural quantities in any square foot of the 
building can be determined with absolute accuracy. The 
present cost of the different building materials used in 
construction and the present cost of labor in erecting and 
assembling these materials are ascertained. 

How the Appraisers Piece-bill a Plant from the 

Ground up 

In piece-billing a plant, the appraisers start with the 
uninsurable portion—foundations and excavation work, 
drainage system, dam structures, flumes, water-wheels 
and wheel-pits—in short, all portions of the property 
which may legally be excluded from the operation of the 


126 WINNING BUSINESS THROUGH SERVICE 

co-insurance clause under the terms of the policy. This 
is important, because nearly every manufacturer’s build¬ 
ing account in his books has the insurable and uninsur- 
able portions-of his plant hopelessly confused. 

To piece-bill accurately, the original builder’s speci¬ 
fications cannot be relied upon. They constitute only a 
general bill of requirements. What the manufacturer 
needs is a specific bill of particulars. To secure this, 
competent construction engineers go over the completed 
structure with the tape-line, measuring accurately the 
quantities of each kind of material used. Material men 
■—not less than three reputable and experienced dealers 
in each town where the appraising is done—furnish 
signed statements as to the cost of all raw material. 
A record of “scale” wages in the various local building 
trades is compiled and proper allowance made for the 
average cost of superintendence of construction. Prom 
this data the present cost of construction is figured much 
more accurately as a guide for insurance than any single 
builder’s bid on a particular structure. 

Detailed Appraisal of Equipment Most Important — 
Classifying in Accordance with Policies 

Proceeding to the interior of the plant, a detailed de¬ 
scriptive inventory is made of the contents of each build¬ 
ing, floor by floor, showing how each machine with its 
appliances is differentiated from others of the same type. 
Measurements and descriptions are made of shafting, 
belting, pulleys, piping, heating and lighting systems 
and all other fixtures. Tools and machine fixtures of all 
kinds are inventoried in each room. Every article is 
priced on the cost of reproduction, obtained from the 
maker of the machine or tool, at the time of the ap¬ 
praisal; or based on the judgment of the appraiser, if 


i 


FIXING INSURANCE VALUES 


127 


the article is not sold on the market. In this way an 
independent, disinterested record of values is established, 
which constitutes practically indisputable evidence in 
the event of a fire. 

No fixed rule as to the classification of this data can 
be given. This depends largely on how the manufactur¬ 
er's policies are written. The general principle is that 
every article so attached to the building that it could 
not be removed without damage to the same is a part of 
the structure. Yet this rule is not invariable. Local 
boards of underwriters and special agents of the insur¬ 
ance companies issue more or less arbitrary rules on 
this subject, which govern the districts where they 
operate. 

In appraising machinery and fixtures the method is 
to price the f. o. b. cost, plus freight and installation, in 
the detailed book of appraisal, noting depreciation on an 
entirely separate sheet. This is done so as not to mix 
up matters of opinion with the matters of fact. 

For instance, a machine is examined by the appraiser 
and fully described in his “ field notes. ” This descrip¬ 
tion is gone over in the pricing bureau by an expert on 
mechanical values, who has at his command the latest 
quotations on the reconstruction cost of this machine 
and all similar appliances. 

In the event of a fire, machinery and fixtures are ap¬ 
praised from up-to-date information, the same as build¬ 
ings. The price-lists from which appraisals are figured 
are constantly annotated with changes in price, as fresh 
catalogs are issued by leading manufacturers of ma¬ 
chinery and tools in this country and in Europe. 

Depreciation is not dependent upon the length of time 
an article has been in the plant. Some appliances will 
depreciate rapidly on account of the character of the 


128 WINNING BUSINESS THROUGH SERVICE 

business; others on account of the amount of work they 
have turned out; others on account of the care or lack 
of care they have had from their owners. All attempts 
to determine the condition of machinery by so-called 
“depreciation tables” are futile. 

How the Appraisal Is Kept Accurate and Sufficiently 

Up-to-date 

A duplicate of all the records which have been made 
up, is placed in fireproof storage, together with signed 
reports fiom the appraisers as to the condition and value 
of everything in the plant. Plans are drawn of each 
floor, locating all the machinery, shafting and other fix¬ 
tures. These fixtures have numbers on the plans, cor¬ 
responding to the numbers given them in the book of 
appraisal. 

The client, having duplicate plans and a duplicate book 
of appraisal, reports changes in the plant on ruled 
forms, especially prepared for that purpose. These re¬ 
ports are filed with the original appraisal, supplementing 
the record, so that a re-appraisal can be made at any 
time. At certain periods, the whole work is gone over, 
so as to get a fresh basis of replacement value and also 
to revise the depreciations. 

The plans are so drawn as to comply with the re¬ 
quirements of the standard policy forms for the fur¬ 
nishing by the assured of “verified plans and specifica¬ 
tions of buildings, fixtures and machinery” in the event 
of a fire loss. When the conditions of the policy have 
been met, official recognition of the re-appraisal made 
after the fire from correct data obtained while the plant 
was a living thing not a blackened corpse—follows as 
a matter of course. 


















































































































































































































































































































































































































































